What is credit?
What is credit based on?
Trust
True or false?
Unsecured credit is credit granted based on a signed credit agreement
True
What does APR stand for?
Annual percentage rate
True or false?
Cash flor is the movement of money into and out of a service
False
What is a business loan?
Money borrowed from a bank for a specific purpose
True or false?
Is an extending credit known as a lender?
True
What are loan granted by?
Commercial banks, credit unions, finance companies, insurance companies credit card agencies, and individuals
What credit transactions are regulated on the federal and state levels?
Consumer credit
What is a private firm that maintains consumer credit data and provides credit information to business for a fee?
A credit bureau
What are the five C's of banking
Cash flow, capacity, capital. collateral, and conditions
What is the party receiving credit known as?
The Debtor
What are credit loans that require collateral known as?
The total amount paid for the use of credit is based off of what three factors?
Interest rate charged, amount of credit used, and length of the repayment period
Before making the decision to extend credit to customers, what should business establish?
A credit policy
What does SBA stand for
The Small business Administration
What is Trade Credit?
A business granting line of credit to another business for a short period of time to purchase its goods and services
What is the total amount paid by a borrower to a lender for the use of credit called?
Finance charge
What does APR include?
Fees and charges
What is a credit report?
A record of credit history and financial behavior for a business or individual
What is an established amount of money a bank makes available for a business too use whenever the money is needed?
Business line of credit
What is a debtor-creditor relationship?
A legal relationship that exists between the two parties
Why are monthly payments made against the balance owed?
What is the formula used when calculating the cost of a loan?
Simple Interest
What is an collection agency?
A company that collects past due bills for a fee
What is trade credit sometimes called?
Supplier financing or vendor financing