Apply Now

Small Business Vocabulary You Need to Know

Loans Canada: The Country's Best Loan Comparison Platform

Small Business Vocabulary You Need to Know

Written by Caitlin Wood

Small Business Vocabulary You Need to Know

Categories

Small Business Vocabulary

Whether you’re a business veteran or trying to launch a start-up you’ve probably come to realize that there are countless terms, titles, and words that are specific to the business world. Possessing a well-rounded business world vocabulary will allow you to excel at your job and benefit from having the knowledge you need to run your business as smoothly as possible. This is why we’ve compiled a list of all the business vocabulary that you need to know.

Creditworthy

Creditworthiness is something lenders use to determine whether a potential borrower is, in fact, able to repay a debt. Creditworthy individuals typically have good credit histories that illustrate their responsible use of credit in the past.

Fixed costs

These are the costs that a business must always pay no matter what is happening within the company during a relevant period of time. An example of a fixed cost would be the rent and utilities a business must pay to have a storefront.

Secured loan

A secured loan is a loan that is backed by collateral. Collateral is a form of security for the lender, it acts as a second source of repayment should the borrower become unable to make their loan payments. Typically business collateral is equipment, accounts receivable, real-estate or even inventory.

Private investors or Angel Investors

This is an investor who has nothing to do with the business they are investing in and usually wishes to remain anonymous. More often than not an Angel Investor invests in a local business for personal (maybe a friend or family member owns the business) or financial (to make money) reasons.

Liabilities

The liabilities of a business are debts it owes. This includes loans, mortgages, accounts payable, deferred revenues and accrued expenses.

Assets

Any item that is owned by a business that has economic value, this could be real-estate, equipment or inventory.

Continuing costs

The expenses that result from the daily operation of a business.

Line of credit

A line of credit is similar to a credit card in that a business is able to borrow up to a certain amount of money whenever they need it and interest is only charged on the money that is actually used. For example, a business can have a $50,000 line of credit but only needs $5,000 to purchase new inventory, the business will only be charged interest on $5,000 and once they repay it they’ll be able to use it again if they need to.

Net worth

The current fiscal value of a business, subtract a business’s liabilities from its assets to find out what its net worth is.

Unsecured loan

An unsecured loan is the opposite of a secured loan; it is not backed up by any collateral. Unsecured loans are typically harder to be approved for.

Start-up costs

Start-up costs are the expenses associated with starting a business. These are one-time only expenses.

Short-term loan

Money that is borrowed from a lender that must be repaid within a year or less.

Variable costs

These are expenses that aren’t fixed; they change depending on the current state of the business. There could be more or less variable costs in one month depending on the sales that the business has.

Equity sources

These are investors that invest their own money into a business for a certain percentage of ownership. This is a riskier type of investment as the business could fail and they could lose the money they invested.

Long-term loan

Capital that is borrowed from a lender and can be paid back over a long period of time, typically longer than a year.

Expenses

Any costs that accrue while a business is operational.

Venture capitalists

These are professionals who invest money to make more money. They look for a new or up and coming business that has the potential for growth.

Contingency fund

All companies should have a contingency fund, it is money set aside to cover any unexpected costs associated with running a business.

Repayment plan

A plan that indicates how long it will take a business to repay their debts.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Make Smarter Borrowing Decisions

Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.

Industry Spotlight

What's happening with Canada's credit industry?

Emma —  Making Life Insurance More Accessible to Everyone

Emma — Making Life Insurance More Accessible to Everyone

Emma, an online insurance platform, allows Canadians to access life insurance in an approachable and convenient way, all from the comfort of their hom

Read More
Locator
Find The Best Rate
In Your Region
OR
Best Personal Loan Provider by Greedy Rates
Icon

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan.

Your data is protected your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Keep Track Of Your Credit Score

Subscribe with Credit Verify to monitor your credit rating and get your free credit score.