GLOSSARY of Business Terms — D through G |
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D
Hardware – The equipment used in a data processing system.
Debenture – An unsecured debt that is NOT backed by collateral. It allows the holder to receive the principal and interest installments based on the integrity of the borrower
Debt Financing – This is where you or your business receives a long-term loan (by selling bonds or notes) that must be paid back according to a predetermined schedule and interest rate.
Deed of Trust – The title of a property is given to a trustee as collateral.
Default – Failure to repay a loan or otherwise meet the terms of your credit agreement or lease/
Deferred Loan – A postponed repayment of a loan until a later, specified date.
Depreciation – A decline in the value of equipment and property due to physical deterioration, time, or the advancement of new products.
Disbursement – (a) The payment of loan money to the borrower usually at or following the closing; (b) Funds paid.
Divestiture – Sale of a company or change of control to another group.
Drop Shipment – A shipment to the consumer directly from the supplier.
E
Earning Power – The ability of a company to turn a profit. Good earning power is essential when applying for a loan.
Employer Identification Number (EIN) – A new business must file for an identification number with the IRS.
Enterprise – Another word for a business or a collection of establishments owned by one company.
Entrepreneur – A person responsible for starting and managing a business who assumes the financial risks.
Equity – Measure of ownership in a business.
Equity Financing – Selling a portion of your company in the form of common or preferred stock to outside investors, thus giving the investor the right to share in the company's profits without the obligation of repaying the funds.
Equity Partnership – A limited partnership that provides start-up capital to businesses.
Escrow – Two parties decide to have money deposited and held by a third party until specific conditions have been reached.
Employee Stock Ownership Plan (ESOP) – Stock in a company that is allocated to its employees over time.
Establishment – One unit of a business, located separately from its parent enterprise or as a stand-alone.
Exact Interest – Interest based on 365 days a year.
F
Factoring – The selling of accounts receivable to another firm at a discounted rate.
Fiduciary – A company that holds the assets of another party and invests them on behalf of the party.
Financial Reports – Reports such as income statements, cash flows, and balance sheets that are used when documenting the financial aspects of your business.
Financing – New capital given to a business, usually via a loan
Fiscal Year – An accounting period consisting of 12 months.
Fixed Cost – A cost that does not vary with the volume of sales or production.
Flow Chart – A graph using symbols to chart the analysis of a problem.
Foreclosure – The owner's interest in a property is sold due to his or her inability to pay the mortgage.
Franchise – A business entered into that has a predetermined plan and product line.
Free on Board (FOB) – The supplier's obligations to pay the shipping costs are fulfilled once the product reaches a certain destination..
Grace Period – The period from the time a payment is due to the point at which a creditor will take legal action.
Guarantee – A third party agrees to repay a loan if the entity responsible for the loan cannot.
Guaranteed Loan – A loan that the government or Guarantor agrees to pay if the borrower cannot pay the interest and principal.
Guarantor – A person or business who guarantees a loan
