ACCOUNTING The recording, classifying, summarizing and interpreting
in a significant manner and in terms of money, transactions and events of a financial
ACCOUNTS PAYABLE - Trade accounts of businesses representing obligations to pay
for goods and services received
ACCOUNTS RECEIVABLE Trade accounts of businesses representing moneys due for goods
sold or services rendered evidenced by notes, statements, invoices or other written evidence of a present
ACID RATIO- Current assets less inventories divided by current
liabilities. Also known as "Quick Ratio."
ACQUISITION- The acquiring of supplies or services by the federal
government with appropriated funds through purchase or lease.
AFFILIATES- Business concerns, organizations, or individuals that control
each other or that are controlled by a third party. Control may include shared management or ownership;
common use of facilities, equipment, and employees; or family interest. The calculation of a firm's size
includes the employees or receipts of all affiliates. Affiliation with another business concern is based on
the power to control, whether exercised or not. Such factors as common ownership, common management and
identity of interest (often found in members of the same family), among others, are indicators of
affiliation. Power to control exists when a party or parties have 50 percent or more ownership. It may also
exist with considerably less than 50 percent ownership by contractual arrangement or when one or more parties
own a large share compared to other parties. The affiliated business concerns need not be in the same line of
AMORTIZATION- Gradual reduction of term debt by periodic payment sufficient
to pay current interest and to eliminate the principal at maturity.
ANCILLARY BOND- A type of surety bond where the surety company guarantees
other factors which are incidental and essential to the performance of a
RATE-The cost of credit as a yearly
ANNUAL RECEIPTS- Receipts are averaged over a firm's latest 3 completed fiscal
years to determine its average annual receipts. "Receipts" means the firm's gross or total income, plus cost
of goods sold, as defined by or reported on the firm's Federal Income Tax return. The term does not include,
however, net capital gains or losses, nor taxes collected for and remitted to a taxing authority if included
in gross or total income. The firm may not deduct income taxes, property taxes, cost of materials or funds
paid to subcontractors. Travel, real estate and advertising agents, providers of conference management
services, freight forwarders and customs brokers may deduct amounts they collect on behalf of another. If a
firm has not been in business for 3 years, the average weekly receipts for the number of weeks the firm has
been in business is multiplied by 52 to determine its average annual
APPRAISED VALUE- The value placed on an item, product or business by an
appraiser, recognized for experience in a particular field.
ASSETS- The entire property of a person, association, corporation, or
estate applicable or subject to the payment of debts.
ASSET-BASED LENDING-Financing secured by pledging assets (inventory, receivables,
or collateral other than real estate)
ASSUMPTIONS- The act of assuming/undertaking another's debts or
AUCTION- A public sale of goods to the highest
BALANCE SHEET- Financial statement listing a company's assets, liabilities,
and equity on a specific date.
BID BOND- A type of surety bond wherein the surety company guarantees
the bidder will enter into a contract and furnish the required payment and performance
BOOK VALUE- The value of an item or property at a specific time after
deducting depreciation from original cost.
BUSINESS CONCERN- A business concern eligible for assistance as a small business
is a business entity organized for profit, with a place of business located in the United States, and which
operates primarily within the United States or makes a significant contribution to the US economy through
payment of taxes or use of American products, materials, or labor.
CAPITAL- 1. Assets less liabilities, representing the ownership
interest in a business; 2. A stock of accumulated goods, especially at a specified time and in contrast to
income received during a specified time period; 3. Accumulated goods devoted to the production of goods; 4.
Accumulated possessions calculated to bring income.
CAPITALIZATION- The basic resources of a company including the owner's equity,
retained earnings and fixed assets. One of the "Five C's" of Credit
CASH FLOW- The movement of money into and out of your
CASH FLOW STATEMENT- An accounting presentation showing how much of the cash
generated by the business remains after both expenses (including interest) and principal repayment on
financing are paid. A projected cash flow statement indicates whether the business will have cash to pay its
expenses, loans, and make a profit. Cash flows can be calculated for any given period of time, normally done
on a monthly basis. Also, one of the Five "Cs" evaluated in determining a loan applicant's
COMPANY- The 504 Certified Development Company (CDC) Program provides
growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. A
Certified Development Company is a nonprofit corporation set up to contribute to the economic development of
its community. CDCs work with the SBA and private-sector lenders to provide financing to small businesses.
There are about 270 CDCs nationwide. Each CDC covers a specific geographic
PROGRAM- CLP- The most active and expert lenders qualify for the SBA's
streamlined lending programs. Under these programs, lenders are delegated partial or full authority to
approve loans, which results in faster service from SBA. Certified lenders are those who have been heavily
involved in regular SBA loan-guaranty processing and have met certain other criteria. They receive a partial
delegation of authority and are given a three-day turnaround by the SBA on their applications (they may also
use regular SBA loan processing). Certified lenders account for nearly a third of all SBA business loan
CHARACTER- The degree to which a potential borrower feels a moral
obligation to repay debts as evidenced by the borrower's credit and payment history. One of the "Five Cs"
used in a lending officer's determination of a particular loan applicant's
COLLATERAL- Something of value--securities, evidence of deposit or other
property--pledged to support the repayment of an obligation. Also one of the Five "Cs" used in determining a
loan applicant's credit worthiness.
COLLATERAL DOCUMENT- A legal document covering the item(s) pledged as collateral on
a loan, i.e., note, mortgages, assignment, etc.
COLLATERAL VALUE-Value of pledged asset(s) as determined by an appraisal or
other methods of valuation. Lenders often discount collateral by a certain
COMMERCIAL PAPER- Unsecured promissory notes of large
COMMITMENT-When a lender agrees to lend a specific amount, with rates,
terms, conditions and covenants, in writing.
CONCENTRATION-When a lender’s loan portfolio is heavy in a particular
industry or type of business.
CONDITIONS- External factors such as government regulation, competition,
industry trends, national economic trends, that can affect the success of a business. One of the "Five Cs" of
CONTINGENT LIABILITY- A potential obligation that may be incurred dependent upon the
occurrence of a future event. Two examples are: (1) the liability of an endorser or guarantor of a note if
the primary borrower fails to pay as agreed and (2) the liability that would be incurred if a pending lawsuit
is resolved in the other party's favor.
COST OF GOODS SOLD-Cost to make a product, including materials, labor, and related
COVENANT- A prescription for action in a loan
COVENANT NOT TO
COMPETE- The agreement by the seller of a business, not to enter into
competition with the buyer of the business within a specific area for a specific period of
CREDIT- Time allowed for the payment of goods or services sold on
trust as well as confidence in the buyer's ability and intention to fulfill their financial
CURRENT ASSETS-Assets that can be converted into cash in one year. Non-Current
Assets take one year or more.
CURRENT LIABILITIES-Money you agreed to repay by signing notes, or by being a
co-maker or guarantor of loans. Lenders want to know how much money you are liable for if the loan results in
legal actions or contested taxes.
CURRENT RATIO- The ratio of current assets to liabilities. Also called "quick
DEBENTURE- Debt instrument evidencing the holder's right to receive
interest and principal installments from the named obligor. Applies to all forms of unsecured, long-term debt
evidenced by a certificate of debt.
DEBT TO TOTAL ASSETS
RATIO- Total debt divided by total
DEBT CAPITAL- Business financing that normally requires periodic interest
payments and repayment of the principal within a specified time.
DEBT FINANCING- The provision of long term loans to small business concerns in
exchange for debt securities or a note.
DEED OF TRUST- A document under seal which, when delivered, transfers a
present interest in property. May be held as collateral.
DEFAULTS- The nonpayment of principal and/or interest on the due date as
provided by the terms and conditions of the note.
DEFERRED LOAN- Loans whose principal and or interest installments are
postponed for a specified period of time.
DEPRECIATION-Except for land, asses wear out. The value goes down and can be
deducted from your business as an expense. Present values of assets are shown as original cost less
depreciation. Market value, or the price you could sell it for, could differ from this
DEPRECIATION SCHEDULE- An accounting procedure for determining the amount of value
left in a piece of equipment.
RATE- One in which the amount of interest is deducted from the face
value of the loan with the borrower receiving the remainder.
DIVESTITURE- Change of ownership and/or control of a business from a
majority (non-disadvantaged) to disadvantaged persons.
EASEMENT- A right or privilege that a person may have on another's land,
as the right of a way or ingress or egress.
EQUITY- An accounting term used to describe the net investment of
owners or stockholders in a business. Under the accounting equation, equity also represents the result of
assets less liabilities.
EQUITY FINANCING- The provision of funds for capital or operating expenses in
exchange for capital stock, stock purchase warrants and options in the business financed, without any
guaranteed return, but with the opportunity to share in the company's profits. Equity financing includes
long-term subordinated securities containing stock options and/or warrants.
EQUITY PARTNERSHIP- A limited partnership arrangement for providing start-up and
seed capital to businesses.
ESCROW ACCOUNTS- Funds placed in trust with a third party, by a borrower for a
specific purpose and to be delivered to the borrower only upon the fulfillment of certain
FAIR MARKET VALUE- What a qualified buyer will pay for goods, services, or
FINANCIAL RATIOS- Measures of capital, including debt to asset, current, and
debt to worth. See individual definitions for "acid," "current," "quick"
FINANCIAL REPORTS- Reports commonly required from applicants request for
financial assistance, e.g.: Balance Sheet -A report of the status of a firm's assets, liabilities and owner's
equity at a given time.
FINANCIAL STATEMENT-Reports showing the financial condition of a business on a
particular date or for a period of time (such as one year). Lenders review the Balance Sheets and Income
FIXED ASSETS- Equipment, buildings, etc., which are purchased and used for
FIXED COSTS- Costs of doing business such as rent, utilities, depreciation,
taxes, etc., that remain generally the same regardless of the amount of sales of goods or
FORECLOSURE- The act by the mortgagee or trustee upon default, in the
payment of interest or principal of a mortgage of enforcing payment of the debt by selling the underlying
FRANCHISING- A continuing relationship in which the franchisor provides a
licensed privilege to the franchisee to do business, and offers assistance in organizing, training,
merchandising, marketing and managing in return for a consideration. Franchising is a form of business by
which the owner (franchisor) of a product, service or method obtains distribution through affiliated
dealers(franchisees). The product, method or service being marketed is usually identified by the franchisor's
brand name, and the holder of the privilege (franchisee) is often given exclusive access to a defined
GOODWILL- An intangible asset of a business that relates to a favorable
relationship with customers, and excess earning power.
GROSS PROFIT-Gross sales less cost of goods sold. This is your mark-up. Also
called gross margin.
GROSS SALES-Revenue or income from sales before returns and
GUARANTEED LOAN- A loan made and serviced by a lending institution under
agreement that a governmental agency will purchase the guaranteed portion if the borrower
GUARANTOR-A guarantor has the same responsibilities as a co-signer. If
the loan goes into default and is not paid by the signer(s) of the loan, the guarantor is
GUARANTY- Promise by an individual or organization to repay a loan in
the event of default.
INCOME STATEMENT- Financial statement showing a company's sales, expense and net
income or loss for a specific period of time.
LEASE- A contract between the owner (lessor) and the tenant (lessee)
stating the conditions under which the tenant may occupy or use real estate or equipment. Terms usually
include a specific period of time and a predetermined rate.
IMPROVEMENTS-Improving your leased business location, at your own
LESSEE- The user of equipment or property being
CREDIT-(L/C)- Payments to a third party by the lender, on the owner’s
LIABILITY- Debt owed by the company such as bank loans or accounts
LIEN- A charge upon or security interest in real or personal
property maintained to ensure the satisfaction of a debt or duty ordinarily arising by operation of
LINE OF CREDIT- A short-term loan, usually less than one
LIQUID ASSETS- Cash, checks and easily-convertible securities available to
meet immediate and emergency needs.
LIQUIDATION- The disposal, at maximum prices, of the collateral securing a
loan, and the voluntary and enforced collection of the remaining loan balance from the obligators and/or
LIQUIDATION VALUE- The net value realizable in the sale (ordinarily a forced
sale) of a business or a particular asset.
LONG-TERM LIABILITIES-Expenses, loans, and payables due after one
LOSS RATE- A rate developed by comparing the ratio of total loans charged
off to the total loans disbursed from inception of the program to the present
LOSS RESERVE ADJUSTMENT
RATE- A reserve rate based upon the ratio of the aggregate net
chargeoffs (chargeoffs less recoveries) for the most recent five years to the total average loans outstanding
for the comparable 5-year period.
MARKET VALUE- What a willing buyer will pay for goods, services, a property
or a business.
NET WORTH- Property owned (assets), minus debts and obligations owed
(liabilities), is the owner's equity (net worth).
NOTES AND ACCOUNTS
RECEIVABLE- A secured or unsecured receivable evidenced by a note or
open account arising from activities involving liquidation and disposal of loan
PERFORMANCE BOND- A type of surety bond where the surety company guarantees the
contractor will fulfill the contract in accordance with its terms.
PROGRAM-PLP- The most active and expert lenders qualify for the SBA's
streamlined lending programs. Under these programs, lenders are delegated partial or full authority to
approve loans, which results in faster service from SBA. Preferred lenders are chosen from among the SBA's
best lenders and enjoy full delegation of lending authority in exchange for a lower rate of guaranty. This
lending authority must be renewed at least every two years, and the lender's portfolio is examined by the SBA
periodically. Preferred loans account for more than 10 percent of SBA
PRIME RATE- Interest rate which is charged business borrowers having the
highest credit ratings, for short term borrowing. As published daily in the Wall Street Journal, it is the
basis for rates to other lenders.
PRO FORMA-Forecasting future income, expenses, or cash flow with
RETAINED EARNINGS-Net profits accumulated through the company’s life and reported
in the net worth or equity section of the balance sheet. Note: Can be negative if losses
RETURN ON INVESTMENT- The amount of profit (return) based on the amount of resources
(funds) used to produce it. Also, the ability of a given investment to earn a return for its
SBAExpress- Makes it easier and faster for lenders to provide small
business loans of $150,000 or less; allows lenders to use their own forms and processes to approve loans
guaranteed by the U.S. Small Business Administration; provides a rapid response from the SBA - within 36
hours of receiving your complete application; lets lenders take advantage of electronic loan processing; and
helps lenders provide smaller revolving loans.
SBA LOW DOC - streamlines the making of small business loans. The maximum
loan-$150,000. Calls for a response from the SBA within 36 hours of receiving a complete application.
Guaranty percent follows 7(a) policy.
SBIC-Small Business Investment Company- Licensed by the Small
Business Administration, SBICs are privately owned and managed investment firms. They are participants in a
vital partnership between government and the private sector economy. With their own capital and with funds
borrowed at favorable rates through the Federal Government, SBICs provide venture capital to small
independent businesses, both new and already established.
SECONDARY MARKET- Entities who purchase an interest in a loan from an original
lender, such as banks, institutional investors, insurance companies, credit unions and pension
SECURED LOAN-Loan secured by collateral (which will be liquidated if the
borrower defaults on the loan).
SURETY BOND- A three-way agreement between a surety company, a
contractor and the project owner. If the contractor fails to comply with the contract, the surety assumes
responsibility and ensures that the project is completed. By law, prime contractors to the federal government
must post surety bonds on federal construction projects valued at $25,000 or more. Many state, county, city
and private-sector projects require bonding as well.
BILLS- Short term obligations of the U.S.
TANGIBLE ASSET-Real property such as buildings and machinery. Trademarks,
goodwill, or accounts receivable are not considered tangible assets.
TERM-A loan’s maturity, stated in months or
TERM LOAN-Loan, given in one lump sum, is provided at the closing.
Repayment is monthly.
USURY- Interest which exceeds the legal rate charged to a borrower
for the use of money.
VENTURE CAPITAL- Money used to support new or unusual commercial undertakings;
equity, risk or speculative capital. This funding is provided to new or existing firms that exhibit
above-average growth rates, a significant potential for market expansion and the need for additional
financing for business maintenance or expansion.
WORKING CAPITAL- Cash and short-term assets that can be used for
current needs -- bills, etc.
To prequalify for
financing, download the following forms and provide the following information and fax to (202) 478-1811 or
email to email@example.com:
Completed Tri-Merged Credit Report or Credit Authorization
2013 Business Financials (Seller / Borrower, if available)
2014 Year-To-Date Business Financials (Seller / Borrower, if available)
Last Three Years Fuel Gallonage (Seller / Borrower)
So what are you waiting for? You can convenienently apply online for a loan here or download the
prequalification form here. First time inquiries should inquire at firstname.lastname@example.org. Let us prove to you
that PetroMAC truly "pumps capital into YOUR C-store."