Accounts Receivable (A/R)
Amounts owed to a business by customers for goods or services already delivered.
Need the broader terminology?
Use the U3CN Master Glossary or return to the Business Funding section.
U3 CAPITAL NETWORK GLOSSARY
Business Funding Glossary
Plain-language terminology for Businesses seeking capital. Definitions are designed to support clearer private-market conversations. Technical, legal, tax, engineering and transaction meanings can vary by agreement, reporting standard and jurisdiction.
Acquisition Finance
Capital used to finance the purchase of a business, business unit or asset.
Advance Rate
The percentage of eligible collateral value a lender is willing to finance under a facility, subject to its credit policy.
Asset-Based Lending (ABL)
Financing primarily supported by eligible business assets such as receivables, inventory or equipment.
Borrowing Base
A calculation used to determine how much financing may be available based on eligible collateral.
Bridge Financing
Short-duration financing intended to address a temporary capital need until a longer-term event or financing occurs.
Bridge Loan
Short-term financing intended to bridge a timing or capital gap until a planned event, refinancing, sale or longer-term financing.
Commercial Real Estate Finance
Financing associated with income-producing or business-use real estate.
Construction Finance
Financing used to fund eligible development and construction costs for a project or property.
Credit Box
The criteria a capital provider uses to determine which financing opportunities fit its mandate.
Debt Service Coverage Ratio (DSCR)
A ratio comparing cash flow available for debt service with required principal and interest payments under a stated methodology.
Eligible Receivable
An account receivable that satisfies specified criteria for inclusion in a borrowing base or financing calculation.
Equipment Finance
Financing or leasing used to acquire business equipment and other eligible productive assets.
Equipment Lease
An agreement granting use of equipment for stated payments and terms without necessarily transferring ownership at inception.
Facility
An agreed financing arrangement under which funds may be advanced subject to its terms.
Factoring
A financing arrangement involving the sale or assignment of eligible accounts receivable to obtain cash sooner.
Grant
Funding awarded under a public, nonprofit or other program subject to eligibility, application and compliance requirements and generally not structured as a conventional loan.
Incentive
A financial, tax, regulatory or other benefit intended to encourage specified investment, development or activity, subject to program rules.
Invoice Factoring
A financing arrangement involving the purchase of eligible accounts receivable, subject to the factor agreement.
Line of Credit
A credit facility that permits borrowing up to an approved amount, subject to its terms and availability.
Loan-to-Value (LTV)
A ratio comparing the amount financed with the value of the collateral or asset used in the calculation.
Merchant Cash Advance (MCA)
A commercial financing arrangement commonly structured as the purchase of a portion of future business receivables or revenue rather than a conventional term loan.
Mortgage Note
A debt obligation secured by real property under the applicable loan and security documents.
Non-Dilutive Capital
Capital structured without issuing additional common equity ownership, although terms may include fees, warrants or other economics.
Non-Recourse Factoring
Factoring in which the factor assumes specified credit risk, subject to exclusions and the governing agreement.
Personal Guarantee
A contractual commitment by an individual to be responsible for specified obligations of another borrower or entity.
Project Finance
Financing structured around a specific project and its assets, contracts, cash flows or sponsors.
Purchase Order Finance
Financing intended to help fulfill qualifying customer purchase orders, typically based on the transaction, supplier and customer characteristics.
Recourse Factoring
Factoring in which specified credit or payment risk can be returned to or remain with the seller under the agreement.
Refinancing
Replacing an existing financing obligation with new financing.
Revenue-Based & MCA Financing
A commercial financing arrangement commonly structured as the purchase of a portion of future business receivables or revenue rather than a conventional term loan.
Revolver
A revolving credit facility that allows eligible amounts to be borrowed, repaid and borrowed again during its term.
Sale-Leaseback
A transaction in which an owner sells an asset and leases it back for continued use under agreed terms.
Underwriting
The process of evaluating an opportunity, borrower, investment, asset or transaction against specified criteria and risks.
Use of Funds
What the business intends to accomplish with the requested capital.
Working Capital
Capital available to support day-to-day business operations and short-term operating needs.