What is Asset-Based Lending?
Asset-based lending is a form of business lending in which a loan is offered by a Lender to a Borrower against the value of one or more assets that the Borrower puts up as collateral for the loan. This asset secures the loan in a Loan-to-Value (LTV) ratio. For example,… Read more »
What is Receivables Turnover in a Business?
Receivables Turnover, also known as Average Collection Period, is the average number of days it takes for a business to collect payment from its customers. In other words, it measures how quickly a business converts its Accounts Receivable into Cash. Cash is vital for the survival of any business so it is… Read more »
What is Amortization?
Amortization is an accounting method for spreading out the costs for the use of a long-term asset (such as intellectual property) over the lifetime of this long-term asset. Amortization expenses account for the cost of long-term assets (like computers and vehicles) over the lifetime of their use. Also called depreciation… Read more »
What are Accrued Expenses?
Accrued Expenses are expenses that a business incurred for which there is no invoice or documentation issued yet available for its payment. It classified on the Balance Sheet as Current Liabilities so it is expected to be repaid within 12 months. Examples of Accrued Expenses A common example of an… Read more »
What is the Acid-Test Ratio?
The acid-test ratio compares the Quick Assets of a business to its Current Liabilities. Quick Assets are the business assets that can be converted into cash quickly; this generally means within 90 days. Quick Assets include Cash, short-term liquid marketable securities, and Accounts Receivable. It is a metric that is… Read more »
What is the Difference Between Accrual Accounting and Cash-based Accounting?
Accrual and Cash-based accounting are two different accounting methods that accountants use to prepare financial statements. They are both perfectly legal and acceptable within International Financial Reporting Standards (IFRS). So, What’s the Difference? The major difference between the methods is when Revenues and Expenses are recognized. Accrual Accounting In Accrual… Read more »
Managing Accounts Receivable in a Business
What is Accounts Receivable? Accounts Receivable is money that is owed to a business after the business has sold its product to a customer. The business is waiting to receive payment for its sale. As with Accounts Payable, it is crucial for a business to manage its Accounts Receivable correctly… Read more »
The Importance of Managing Accounts Payable
Accounts Payable is the money a business owes its suppliers for goods and services that have been delivered to the business. The supplier would have also provided an invoice for the delivery. Managing accounts payable is incredibly important as it directly affects the cash flow of the business. Cash flow… Read more »
What Are Accelerated Payments in Business Operations and Business Loans?
Accelerated Payments in Business Loans Accelerated Payments in Business Loans occur when a borrower business increases the speed of repayment of its loan by: This reduces the interest costs. This can benefit a business if it expects to have sufficient cash flow to handle these accelerated payments. Accelerated Payments in… Read more »
What is a Business Loan Broker (Video)?
We should begin this conversation by stating that our firm has some of the best business loan brokers in Canada and U.S. Our mission is to understand the business funding needs of our business clients and to find and deliver the lowest-cost business loans to these clients. Business Loan Broker… Read more »