Glossary

A financial ratio that measures a company’s ability to pay its fixed expenses for a period through its earnings for that period. 

Any type of fixed expense that recurs on a regular basis. For purposes of the fixed charge coverage ratio, fixed charges commonly include interest expense paid in cash, principal payments in respect of indebtedness for borrowed money and all “restricted payments” paid in cash.

A good that has become permanently attached to real property or so related to realty that it is considered part of such real property.

An interest rate that is adjusted periodically based upon a specific index or benchmark. For example, a floating rate may be tied to an index such as LIBOR (London Interbank Offered Rate).

A form of inventory financing for a dealer of consumer or commercial goods. Floor plan finance is an alternative to traditional bulk inventory financing in that the lender finances the dealer’s purchase of specific goods (i.e., on an individual rather than bulk basis), effectively substituting itself for the supplier. 

An agreement by a lender to refrain, for a limited period, from exercising rights or remedies against a borrower, other obligor and/or collateral following the occurrence of an event of a default.

The estimated amount of money that would be received for an asset if the asset were immediately sold at auction.

In the past, lenders didn't typically lend on foreign receivables because the credit information system in most foreign countries is not as well established as it is in the United States and, as a result, is not as reliable. Also, geographical distances can create the potential for payment problems, particularly for a third party trying to collect. Most importantly, the governing laws of the country in which the account debtor is located may prevent or inhibit collection efforts, and may even deny our legal interest in the receivable (since the UCC is a United States law).