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Chapter 10
| Term | Definition |
|---|---|
| Bank Finacing | A method of financing a business by borrowing some of the necessary funds from a lending institution. |
| Co-signer | One who signs a document of debt (such as a promissory note) agreeing to satisfy the debt of another (the debtor) only if and when the debtor fails to repay the debt. |
| Creditor | The person or party to whom money is owed |
| Credit History | A report evaluating an individual’s past repayment history as to loans, mortgages, credit cards, student loans and any other forms of installment debt. |
| Debtor | The person responsible for a debt and its repayment |
| Equity | The value of an asset calculated by subtracting the remaining balance of the loan from the current value of the asset |
| Guaranty | An undertaking to pay another’s debt. |
| License | Legal permission to own or operate something of a business nature |
| Net Worth | The material value of a person measured by subtracting all this person owes from the value of all this person owns. |
| Personal Fiance Statement | A statement of an individual’s assets, liabilities and net worth, supported by accompanying schedules to explain each element |
| Self-employment Tax | A tax born by sole proprietors similar to social security tax but at a higher rate than wage earners. |
| SBA guarantee | A form of federal loan guarantee that operates in a way similar to that of a co-signer. SBA guaranteed loans have enabled many entrepreneurs access to needed capital when banks are not fully confident of the lender’s ability to repay the loan. |
| Self financing | A method of financing a business by using one’s own personal capital. |
| Unemployment Tax | An employer-paid tax to both federal and state governments that functions like insurance if and when an employee separates from a company under certain conditions |
| Working capital | Money set aside to be used for operating expenses |
Created by:
Jdegolier16
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