A subordinated term loan or subordinated loan is debt that’s paid off after all principal loans are paid off, if there’s any capital left. It’s also known as subordinated debt,…
Read More
Airball or sometimes referred to as a financing gap is a portion of a loan that exceeds the amount supported by the underlying collateral and is dependent on support from…
A stretch financing or sometimes called a stretch loan is a form of financing for a business that can be used to cover a temporary gap. The loan “stretches” over…
Your tangible net worth is similar to your net worth in that it totes up your assets and liabilities, but it goes one step further. It subtracts the value of…
When a company raises debt, it is often subject to conditions, restrictions, and terms known as debt (or financial) covenants. A restrictive covenant is a condition that restricts, limits, prohibits, or prevents…
An accounting schedule is a document that provides details or proof for the information stated in a primary document. In business, accounting schedules are needed to provide proof for the ending…
The interest coverage ratio (sometimes called times interest earned TIE) is a debt and profitability ratio used to determine how easily a company can pay interest on outstanding debt. The ratio is…
Liquidity is a company’s ability to convert assets to cash or acquire cash—through a loan or money in the bank—to pay its short-term obligations or liabilities.