OTHER TERMS BEGINNING WITH "C"

• Call Loan

  A call loan is a type of loan that can be demanded for repayment by the lender at any given time. The purpose of a call loan is to minimize the financial risk borne by the lender. By having the…

• Capital

  Capital refers to the total of all financial assets held by a company or individual available for operating a business, and creating investment or growth opportunities. Examples of capital in a business include cash, funds in deposit accounts, facilities owned,…

• Carried Interest

  Carried interest is a share of any profits that the general partners of private equity and hedge funds receive as compensation, regardless of whether or not they contributed any initial funds. This method of compensation seeks to motivate the general…

• Cash Advance

  An amount of money advanced to the client before the load has been delivered.

• Cash Against Documents (CAD)

  Cash Against Documents (CAD): In Documentary Collection (D/C or Cash Against Documents) credit providers act as facilitators for their clients by only releasing funding on proper document presentation. Cash against documents funding is a much more robust type of cash…

• Cash Flow

  Cash flow refers to the movement of cash in and out of a business over a specific period, typically measured on a monthly, quarterly, or annual basis. It reflects the inflows and outflows of cash resulting from operating activities, investing…

• Cash Flow Projections

  A cash flow projection is a report of how, where and when money is moving through a business over a given time period. This data is used to project future cash flow patterns allowing a company to plan for growth,…

• Cash-flow Insolvency

  Cash-flow insolvency occurs when an individual or a business is unable to meet its current financial obligations as they come due because of a lack of sufficient cash or liquid assets. This type of insolvency is primarily a short-term issue,…

• Chargebacks (Retailer)

  "There's no doubt about it: manufacturers who fail to meet a retailer's vendor standards can get into financial trouble. After all, shave off $20 here for a short lot, $5 there for a cracked pallet and $10 over here for…

• Client

  The company who sells their invoices to a factoring company. Also known as the client company.

• Client Concentration

  Client Concentration is when a business has only one or a few large customers representing the majority of the business’ revenue. Many banks and factoring companies frown upon client concentration. However, eCapital with its credit protection program is fine with…

• Closing Costs

  Costs involved in becoming a factoring client. Some factoring companies have no closing costs. Other factoring companies charge the cost as a percentage of the total factoring line amount. The closing costs are also referred to as the setup costs.

• Collateral

  In finance, collateral refers to assets that a borrower offers to a lender as security for a loan. The purpose of collateral is to reduce the risk assumed by the lender; in the event that the borrower fails to repay…

• Collateral (or Collateralized) Loan

  A collateralized loan, also known as a secured loan, is a type of loan where the borrower pledges collateral as security for the loan. Collateral is an asset or property that is pledged to the lender to secure the loan,…

• Collections

  Payments that the factor receives for invoices factored by the client.

• Company Voluntary Arrangement (CVA)

  A Company Voluntary Arrangement (CVA) is a formal insolvency procedure in the United Kingdom that allows a financially distressed company to reach an agreement with its creditors in order to repay a portion of its debts over a specified period…

• Concentration

  The maximum amount for which a factor will fund on a single customer in a client’s portfolio. This is often expressed as a percentage of the factoring volume for a given customer. Concentration is used as a risk management measure…

• Confession of Judgment (COJ)

  Written authorization of a loan agreement by the borrower giving the lender a judgment against the borrower in the event there is a default. A Confession of Judgment (COJ) clause or document (many times notarized) allows the creditor (lender) on…

• Confirmed Payables Financing

  Confirmed payables financing, often synonymous with reverse factoring or supplier finance, is a financial arrangement that helps to optimize the cash flow of suppliers by leveraging the creditworthiness of their buyers. This innovative form of financing involves a three-party agreement…

• Consignment Sale

  First, a consignment is NOT a sale. It creates an agency relationship between the consignor and the consignee, where the product, goods or produce continues to belong to the consignor until the consignee sells it on the consignor’s behalf. A…

• Contra Account

  A Contra Account, in terms of A/R financing or Invoice Factoring, is when the Factoring Company's Client and their Customer (the Account Debtor) each owe the other monies. For example, slotting or advertising fees in retailing. This must be disclosed…

• Contract Financing

  Contract Financing is the availability of working capital (sometimes called a mobilization draw) prior to the Government payment to a contractor before the acceptance of goods or services by the Government. You often see these with SME/MBE set-asides. ECapital has…

• Cost-Plus Pricing

  Pricing methodology sometimes agreed as part of a contingent workforce program in which the supplier provides the end-user with full visibility of all the costs in a given outsourced program and where the end-user and intermediary agree contractually on a…

• Covenant

  In finance and business, a covenant refers to a contractual agreement or condition that is included in loan agreements, bond indentures, or other financial instruments. Covenants serve to protect the interests of lenders, bondholders, or investors by imposing certain restrictions,…

• Credit Counsellor (Canadian)

  A credit counsellor in Canada is a trained professional who provides advice and support to individuals facing financial challenges, such as managing debt, improving credit, or dealing with financial stress. The primary goal of a credit counsellor is to help…

• Credit Insurance

  Credit Insurance, Trade Credit Insurance or A/R Credit Insurance, is an insurance policy and a risk management product for companies wishing to protect their accounts receivable from loss due to credit risks such as Customer (Account Debtor) bankruptcy. ECapital does…

• Credit Limit

  A credit limit is the maximum amount of money a lender will issue to a business or individual (debtor). The amount issued is based on a variety of factors that evaluate risk and the likelihood the debtor has the ability…

• Credit Memo

  A Credit Memo, in terms of goods or services, is issued by a seller in order to reduce the amount that a customer owes from an earlier sales invoice. A credit memo may be issued based on a buyer returning…

• Credit Terms

  Credit terms, terms of credit or invoice terms is an agreement between the buyer and the seller that list the timing, amount and also when the title is transferred on a product. For example, Net 30 means your customer is…

• Creditworthiness

  Creditworthiness refers to a borrower's ability and likelihood to repay debt obligations in a timely manner based on their financial history, credit profile, and overall financial stability. Lenders and financial institutions assess an individual's or entity's creditworthiness when evaluating credit…

• Cross-Aged Accounts (10% rule)

  This amount is deducted when a borrower has a customer with balances over 90 days, and also balances under 90 days. The rule states that when a customer has more than 10% of their total balance aged over 90 days,…

• Current Assets

  Current Assets represent the value of all assets within a business that is Cash or expected to be converted into cash within one year and are found in the Asset Section of a Balance Sheet.

• Current Liabilities

  A company's debts or obligations that are due within one year. Current liabilities appear on the company's Balance Sheet and include short-term debt, accounts payable, accrued liabilities and other current debts.

• Current Portion of Long-Term Debt (CPLTD)

  Current Portion of Long-Term Debt (CPLTD) represents the amount of a company's long-term debt that must be paid within the next year. This concept is important to help determine the amount of working capital a company needs to service their…

• Current Ratio

  The Current Ratio is a financial ratio used to evaluate a company's ability to meet its short-term financial obligations. It measures the company's liquidity by comparing its current assets to its current liabilities. The formula for calculating the Current Ratio…

• Customer

  Also known as the debtor. A business that utilizes the services of the client and remits invoice payment to the client’s factoring company.