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Glossary

A resource that has economic value and is owned or controlled by an individual, company, or organization. Assets can be tangible, such as vehicles, land, or machinery, or intangible, such as invoices or anticipated revenues through a merchant card terminal. Assets are used to generate income or provide benefits for their owners. Assets can be used as security for a loan agreement.

These are various types of financial agreements that involve the use of assets as collateral or the restructuring of existing loans

Is a type of financing that uses an asset, such as equipment, vehicles, or machinery, as collateral for a loan. The borrower pays a regular fee to use the asset and can either own it at the end of the contract or return it to the lender.

Is a broad term that covers various forms of financing that are outside the traditional banking system. Alternative finance can include peer-to-peer lending, crowdfunding, invoice finance, or cryptocurrency, among others.

Annual percentage rate (APR) is the annualised interest rate that is charged for borrowing or earned through an investment. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan or income earned over the term of an investment. APR includes any fees or additional costs associated with the transaction, such as origination fees or closing costs, which makes it a more accurate measure of the true cost or return of borrowing or investing than a flat rate. APR can vary depending on factors such as credit score, loan amount, loan term, or type of investment.

The principal sum of the loan, paid by the lender at the start of the loan agreement, which is a consideration that confirms the contract for a loan.

The amount of money that is still owed by the borrower to the lender at any given point in time during the loan agreement, which can change as the borrower makes repayments or accrues interest or fees.

A cash injection is a type of financial support or stimulus that is provided to a business, organization, or individual, usually in the form of a loan.

These are specific types of loans intended for business purposes, often used to purchase or refinance commercial property.

Credit is the ability to borrow money or access goods or services with the understanding that you will pay later. Lenders, merchants and service providers (known as creditors) grant credit based on their confidence you can be trusted to pay back what you borrowed, along with any finance charges that may apply. Credit can help you buy things you need, such as a car or a piece of equipment, or pay for wages or unexpected expenses. However, credit also comes with costs and risks, such as interest, fees and the possibility of continued indebtedness if you cannot repay what you owe. Therefore, it is important to use credit responsibly and manage it wisely.

A credit line is a type of loan that allows a borrower to access funds up to a certain limit, without having to apply for a new loan each time. The borrower can draw from the credit line as needed, and only pays interest on the amount used. A credit line can be secured or unsecured, and can be used for various purposes, such as business expansion, cash flow management, or emergency funding.

This term refers to the checks that lenders perform to assess a borrower’s credit history before approving a loan.

A credit facility is a type of loan that provides a business with access to a specified amount of money that can be used for various purposes. The business can draw from the credit facility as needed, up to the limit, and only pays interest on the amount used.

Contra settlement is a method of settling one finance agreement with another, usually as an ancillary part of a new transaction.

Equity is the difference between the value of an asset and the amount of debt owed on it. For example, if you own a car worth £300,000 and you have a loan of £200,000 secured on it, your equity in that car is £100,000. Equity can also refer to the ownership stake or share in a company or an investment. For example, if you own 100 shares of a company that has 1,000 shares outstanding, your equity is 10%. Equity represents your claim on the assets and earnings of the entity. Equity can increase or decrease depending on the changes in the value of the asset or the entity, or the repayment or accumulation of debt.

A way of accessing the value of an asset without selling it.

Financial Conduct Authority, the regulator in the consumer credit space.

This refers to the Financial Conduct Authority’s regulation of consumer credit broking, with FRN.****** being the specific registration number for the finance broker.

Principal x Interest rate x Number of periods

This term refers to a professional who acts as an intermediary between clients and financial institutions to negotiate loans or financial agreements.

A hire company is a type of business that rents out equipment, vehicles, or services to customers for a fixed period of time. The hire company owns the assets, while the customer pays a fee for use and returns the assets when they are done.

High net-worth individuals (HNWIs) are people who have a high level of wealth, usually measured by their financial assets or income.

Interest is the cost of borrowing money or the return on lending money. It is usually expressed as a percentage of the principal amount (the amount borrowed or lent) over a certain period of time. For example, if you borrow £1,000 at an interest rate of 5% per year for one year, you will have to pay back £1,050 at the end of the year. Interest can be fixed, meaning it stays the same throughout the term of the loan or investment, or variable, meaning it changes depending on market conditions or other factors. Interest can also be compounded, meaning that interest is calculated not only on the initial principal, but also on the accumulated interest. This results in faster growth of the debt or investment over time.

These are third-party firms or individuals that have a business relationship with a broker and can introduce clients to them

Is a type of invoice finance that allows a business to borrow money against its unpaid invoices. The business retains control of its sales ledger and collects payments from its customers as usual. The lender charges a fee and interest on the amount advanced, and the loan is repaid when the invoices are paid.

The process of replacing an existing loan with a new one, usually with different terms and conditions. Refinancing can be done to lower the interest rate, extend the repayment period, or access the equity in the property.

Sale and HP back is a financing arrangement in which a business sells an asset to a lender and then leases it back under a hire purchase agreement. This way, the business can obtain cash from the asset while retaining its use and ownership. Sale and HP back is often used for fixed assets, such as machinery or vehicles, that have a long useful life.

A timely investment is an investment that is made at the right moment to take advantage of favourable market conditions or trends.

Tax allowances are the amount of income or other types of earnings that are exempt from taxation, either partially or fully. They are usually granted by the government to individuals or groups for various reasons, such as encouraging savings, investments, or charitable donations.

VAT deferral is a type of tax relief that allows a business to delay paying its value-added tax (VAT) due to the government. The business can use the deferred amount to improve its cash flow or invest in other areas.

A variable rate is a type of interest rate that can change over time, depending on the market conditions or the terms of the loan agreement. A variable rate can be beneficial for the borrower if the interest rate decreases, but it can also be risky if the interest rate increases. A variable rate is different from a fixed rate, which remains constant throughout the loan period.

This phrase indicates a large number of financial institutions or lenders that a broker works with to secure funding for clients.

These are groups within financial institutions responsible for assessing the risk and eligibility of clients for financial products.

An unsecured loan is a loan that is not backed by any collateral, such as property or assets. The lender relies on the borrower’s creditworthiness and income to repay the loan. Unsecured loans typically have higher interest rates and lower loan amounts than secured loans.