Glossary of lending Terms - C

A status assigned to a loan that is no longer being processed because the loan proceeds have been returned to the lender. Partial cancellations can occur when a portion of the loan proceeds are returned.
Back to Top

Broadly, all the money and other property of a corporation or other enterprise used in transacting its business.
Back to Top

Those financial markets, including institutions and individuals that exchange securities, especially long-term debt instruments.
Back to Top

Long-term debt, preferred stock and net worth. The loan capital of a community development loan fund; includes that which has been borrowed from and is repayable to third parties as well as that which is earned or owned by the loan fund (i.e. "permanent capital").
Back to Top

Short-term loans, usually business loans, providing additional cash to cover cash shortfalls in anticipation of revenue, such as the payment(s) of receivables.
Back to Top

The act of attesting that something is true or meets a standard. The financial aid officer confirms for the lender and guarantor that a loan applicant meets certain eligibility criteria.
Back to Top

Assets pledged to secure the repayment of a loan.
Back to Top

An agreement or promise to do or not to do a particular thing; to enter into a formal agreement; a promise incidental to a deed or contract. The following are functional objectives guiding most covenants: full disclosure of information, preservation of net worth, maintenance of asset quality, maintenance of adequate cash flow, control of growth, control of management, assurance of legal existence and concept of going concern, provision for lender profit or program goals.
Back to Top

The maximum dollar amount a credit card holder may apply to the account.
Back to Top

The maximum amount of money available in an open-end credit arrangement such as a credit card, or overdraft protection
Back to Top

A judgment of someone's ability to repay debts, based on current and projected income and history of payment of past debts. Sometimes expressed as a number called a credit score.
Back to Top

A document containing financial information about a person, focusing on his or her history of paying obligations, such as a mortgage, car payment, utilities, and credit cards. Also includes current balances on outstanding debts and loans, the individual's amount of available credit, public records such as bankruptcies, and inquiries about credit from various companies. A person with a good credit report is likely to get a better interest rate than someone with a poor credit report.
Back to Top

The measure of a person''s creditworthiness. People who are more likely to repay their debts and loans on time are considered a better risk by lenders, and will be charged lower interest rates for unsecured loans and other loans.
Back to Top

A three-digit number that reflects the credit history detailed by a person's credit report. Lenders calculate this number with the assistance of computer systems as part of the process of assigning rates and terms to the loans they make. The higher the number, the better the terms that a lender will offer. Credit scores are also increasingly used by others in making decisions about whether to do business with a consumer, and on what terms. For example, many auto insurance companies increase the insurance premium for people with low credit scores, in the belief that there is a relationship between credit score and making insurance claims
Back to Top

Financially sound enough to justify the extension of credit or a loan.
Back to Top

Assets that will normally be turned into cash within a year.
Back to Top

Liability that will normally be repaid within a year.
Back to Top

Current assets divided by current liabilities -- a measure of liquidity. Generally, the higher the ratio, the greater the "cushion" between current obligations and a firm's ability to meet them.
Back to Top