LENDING

In banking, ACH stands for Automated Clearing House, which is a network that coordinates electronic payments and automated money transfers. ACH is a way to move money between banks without using paper checks, wire transfers, credit card networks, or cash.

An asset is something of value, which is owned by the borrower, that can be used as collateral on a small business loan. Lenders like banks, credit unions and CDFIs require some form of collateral to secure a business loan.

A financial statement that reports a company’s assets, liabilities and shareholders’ equity at a specific point in time

Business registration entails filling out a form, paying a fee, and is officially recognized in your state, county, and/or city. Registering your business protects your business name and legitimizes your business. Secretary of State registration is generally required for MESO business loans.

The total amount of money transferred into and out of a business that is used to pay for day-to-day and long-term expenses.

Community Development Financial Institution

This is an asset(s) pledged by the borrower to secure the loan. The lender can acquire these assets if the borrower defaults on the loan.

The practice of making on-time payments, keeping your balance manageable, keeping accounts that you’ve historically have a good history, don’t exceed your credit limit, don’t miss a payment, and checking your credit report at least once a year or more.

Describe the item or answer the question so that site visitors who are interested get more information. Equifax, Experian, and TransUnion receive your personal information and credit information from lenders in regards to credit approved/open, the amount approved and terms, payment history, missed payment/delinquencies, etc. Based on the information received, your credit score is calculated. 

Credit reports will show your credit score based on details on your accounts and payments history. It will show your personal information, all of your credit accounts and loans, payment history on accounts, credit inquiries from lenders, collections, etc.

A number between 300-850 represents a rating of how likely you are to repay a loan and make the payments on time. Lenders calculate your credit score using the information in your credit report like your history of repaying the money you borrowed, the types of loans you’ve had, how long you have had a particular line of credit or loan, and how much total debt you owe.

Financial statements of a company and shows the company’s revenues and expenses during a particular period. It indicates how the revenues are transformed into net income or net profit.

An income stream is a money a business generates on a regular basis. Some businesses may have more than one income stream. For example, a hair salon may have income from hair cuts/color as well as a separate income stream from selling hair products.

A charge for borrowed money is generally a percentage of the amount borrowed

A liability schedule is a form used to describe current debts, including their monthly payment amounts and total balances. Items that would typically be included on a liability schedule are mortgages, car loans, student loans, credit card debt, or past due balances (rent, utilities, etc).

The median is right in the middle of a group of numbers so that half of the numbers are above that amount and half of the numbers are below it. Median household income is often used to determine the median for a specific geographic area, like a county, by the number of people living in that household.

Net assets are the amount of an item of value that is owned without debt. For example, a vehicle that is worth $10,000 with a loan balance of $6,000, would be considered a net asset of $4,000.

The amount due and owing to satisfy the payoff of the underlying obligation, less interest, or other charges.

A report maintained by a business that shows the business’ income minus expenses.

Small Business Administration loans offer even longer terms and lower costs than traditional term loans, as they come partially guaranteed by the U.S. government. SBA loans are specifically designed to give small business owners the most affordable financing possible as they grow their businesses.

A loan that is repaid in regular periodic payments over a specified period of time. Terms can vary depending upon the nature of the loan and could be as short as several months to several years.

Tradelines are all of your credit accounts and loans in your credit report. Even the ones that you have paid off, you have closed or lenders closed. Active Tradeline is all active accounts that are currently being used or paid on. These are current loans that you are paying on or credit cards that are still open.

This is the process where the lender verifies your income, assets, debt, and property details in order to determine approval/denial of a loan. It is a risk assessment.

A detailed list of what the business will use the requested loan funds for.

The percentage of your available credit that you have used on your account. The lower your utilization percentage, the better your credit score you will have.