Airball in Financing

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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…

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Tangible Net Worth

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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…

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Restrictive Covenant

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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…

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Schedule of Accounts

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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…

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Minimum Liquidity

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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.

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Letter of Credit

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A letter of credit (credit letter) is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the right amount….

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