Business finance glossary
The jargon of business funding, in plain English. No assumed knowledge — just clear definitions so you can borrow with your eyes open.
Amortisation
Repaying a loan in regular instalments that each cover both interest and a slice of the original amount, so the balance reduces to zero by the end of the term.
Annualised cost
The total cost of a facility expressed as a yearly rate, so facilities of different lengths and structures can be compared on a like-for-like basis.
APR (annual percentage rate)
The yearly cost of borrowing including interest and certain compulsory fees, shown as a percentage. A standard way to compare the cost of loans.
Asset finance
Funding used to acquire equipment, machinery or vehicles, where the asset itself usually acts as security — often making it cheaper than an unsecured loan.
Learn more
Balloon payment
A larger-than-usual final payment at the end of an asset finance agreement, which keeps the regular instalments lower during the term.
Bridging loan
Fast, short-term finance used to bridge a gap — for example completing a purchase before longer-term funding or a sale comes through. Repaid from a clear exit.
Learn more
Commercial mortgage
A long-term loan to buy, refinance or develop business premises, secured against the property.
Learn more
Debenture
A legal charge a lender registers over a company's assets as security for borrowing. It sets out the lender's claim if the business can't repay.
Debt service coverage ratio (DSCR)
A measure of how comfortably your cashflow covers your loan repayments. Lenders use it to judge affordability — higher is safer.
Difference-in-charge (DiC) commission
A commission structure where a broker earns more by arranging a higher rate for the customer — a conflict of interest we avoid.
Learn more
Drawdown
The point at which funds are actually released to you. Brokers are typically paid only once a facility is drawn down.
Facility
The general term for any funding arrangement — a loan, a credit line, an asset agreement. "Which facility fits?" means which type of funding suits your need.
Learn more
Factoring
A form of invoice finance where the lender advances cash against your invoices and also manages collections from your customers.
Learn more
Hire purchase
An asset finance agreement where you pay for an asset in instalments and own it outright once the final payment is made.
Learn more
Invoice discounting
Confidential invoice finance where you borrow against unpaid invoices but keep control of collections, so your customers needn't know.
Learn more
Invoice finance
Releasing the cash tied up in unpaid invoices by advancing most of their value as soon as they're raised, instead of waiting for customers to pay.
Learn more
KYB (Know Your Business)
The checks a broker or lender runs to verify a business and its directors — using sources like Companies House — as part of fraud and financial-crime prevention.
Lease (finance / operating)
An agreement to use an asset for regular rentals without owning it, keeping costs predictable and capital free.
Learn more
Merchant cash advance
An advance repaid as a fixed percentage of your future card takings, so repayments rise and fall with your sales.
Learn more
Open Banking
A secure, regulated way to share read-only access to your bank transactions. We use it to price funding on your real cashflow — never your banking login, and you can withdraw access at any time.
Personal guarantee
A director's personal promise to repay a business debt if the company can't. Common on unsecured business lending — we always make any requirement clear up front.
Revolving credit facility
A pre-approved limit you can draw down and repay repeatedly, paying interest only on the balance you're using.
Learn more
Secured loan
Borrowing backed by an asset — usually property. Security typically unlocks larger amounts, longer terms and lower rates, but the asset is at risk on default.
Learn more
Soft credit search
A credit check that doesn't leave a visible footprint on your file or affect your score. It's what lets you see indicative options without a hard search.
Term loan
A fixed lump sum repaid over an agreed term in regular instalments. Can be unsecured or secured against an asset.
Learn more
Unsecured loan
Borrowing with no business asset pledged as security. Usually faster to arrange than secured borrowing, though a personal guarantee is often required.
Learn more
Working capital
The day-to-day cash a business needs to cover its short-term running costs — stock, wages, suppliers — between money going out and coming in.
Learn more
See what you qualify for
Start your application now — it's free, takes minutes, and there's no credit check to view your options.