The money that a company owes to its vendors, creditors or suppliers for goods or services it has received.
The money owed to a company for goods or services it has delivered and for which it issues an invoice. The invoice could be payable immediately or months into the future.
Loans made to a company and secured against collateral (equipment, stock, property or accounts receivable). Also known as asset-based financing.
Bill of Lading
Document that provides the transportation company and the Exporter with details of the type, quantity and destination of the goods being shipped. A document of title, a contract and a receipt for shipped goods. Must accompany goods to destination.
Business line of credit
An amount of credit granted to a bank customer. The borrower can use as much credit as is needed from time to time, up to the limit given.
The amount of money transferred in and out of a company. Represented by inflows (cash received) and outflows (money spent).
An insurance that protects a company's invoices against non-payment by the buyer. Also known as trade credit insurance, export credit insurance or business credit insurance.
The maximum amount of secured or unsecured credit that a lender will grant to a borrower.
The measure lenders use when deciding to lend money. Determined by factors like credit score, available assets, liabilities and repayment history.
Export trade finance
Umbrella term for financial products and solutions used by companies to ease international trade. Helps importers and exporters do business with one another by providing credit to those who need it.
Factoring interest rates
The amount of money a lender will charge. Usually expressed as an annual percentage of the money lent and known as APR (annual percentage rate).
Financial due diligence
An investigation to confirm information before entering into an agreement. For example, examining financial records before agreeing a proposed deal.
Global supply chains
A network of companies involved in the manufacture and delivery of products. Starts from production of raw materials and ends with delivery of the finished product to an end-user.
A short-term credit arrangement in which a company raises money against its unpaid invoices. Lenders advance a percentage of the invoice value and are repaid when the invoice is settled. There's a fee for the service.
Letter of credit
A bank guarantee that a supplier's invoice will be paid on time and in full. Often used in international trade.
Loans with collateral
A loan in which a lender accepts an item as security for a loan. Collateral acts as protection for the lender. If the borrower defaults, the lender may dispose of the collateral to recoup losses.
Net working capital
Also known as NWC, net working capital is the difference between a company’s assets and liabilities. NWC can be positive or negative, indicating a company's financial health and liquidity.
A type of invoice factoring (see definition above) in which the lender assumes responsibility for collecting payment from the debtor and takes the loss if the invoice isn't paid.
A type of invoice factoring (see definition above) in which the borrower retains responsibility for collecting payment from the debtor and takes the loss if the invoice isn't paid.
Supply chain finance
Credit facility with a financier that allows suppliers and buyers to manage their cash flows according to their needs. Suppliers can draw against unpaid invoices, buyers can defer payments or pay early and benefit from discounted prices.
An arrangement in which a customer is allowed to buy goods or services and pay the supplier at a later date.