Five Cs of Banking
The movement of money into and out of a business.
Cash Flow
A loan for a specific amount that must be repaid with interest by a specified date or according to a specified schedule.
Closed-end credit
A record of credit history and financial behavior for a business or individual.
The potential of credit not being repaid.
Credit Risk
Occurs when a business buys goods or services on credit from another business.
Trade Credit
Relate to the overall environment in which the business operates.
Conditions
The ________ is the amount of money borrowed.
Principal
A numerical measure of a loan applicant's creditworthiness at a particular point in time.
Credit Score
The accounts of customers who do not pay after repeated attempts to collect may be turned over to a ___________ ______.
Collection Agency
Usually used to start a new business or to expand the operations of an existing business.
Business Loan
The ability of a business to repay a loan.
Capacity
Installment Loan
A private firm that maintains consumer credit data and provides credit information to businesses for a fee.
Credit Bureau
T/F: An aging report typically shows receivables in the past as 30 days, 60 days, 90 days, and 120 days and over.
False
T/F: Sometimes suppliers offer a discount for early payments.
True
T/F: Collateral may also be a co-signer.
True
Obtaining a loan for a building. (Hint: Collateral would be requited)
Secured Credit
Also known as the FICO score.
Credit Score
This activity is critical to maintaining enough cash flow to keep the business open.
Accounts Receivable
This term is sometimes called supplier financing or vendor financing.
Trade Credit
Also can be referred as equity.
Capital
The total amount paid by a borrower to a lender for the use of credit.
Finance Charge
Equifax, Experian, and TransUnion LLC are national credit-reporting agencies known as...
Credit Bureaus
The purpose of this task is to indicate which receivables are more urgent to collect because they have been past due for a longer amount of time.
Accounts Receivable Aging Report
An established amount of money a bank makes available for a business to use whenever the money is needed.
Business Line of Credit