Glossary

Well after the completion of the appraisal itself, appraisers will continue to monitor the company and collateral. Importantly, appraisers will often conduct retail appraisals on an equity bid basis, reflecting their willingness to provide an immediate cash guarantee on the value of the consumer goods they appraise. The result is the more definitive, accurate appraisal in the marketplace.

A legal right which permits a company to require its investors to pledge a certain amount of stock or any other security representing an ownership interest to the company.

The amount generated by applying the stated advance(s) rate to the eligible portion of the collateral and then subtracting the outstanding loan balance against that collateral.

A loan agreement or bond indenture provision that requires the borrower to apply excess cash flow (or some percentage of excess cash flow) to reduce the outstanding debt balance.

Excess inventory, sometimes also know as slow moving inventory or obsolete inventory, is unsold product that: 1. exceeds the projected consumer demand (usually determined based on the prior 12 months actual usage or projected usage over the subsequent 12 months period); 2. has not been sold in 12 months; 3. Inventory relating to cancelled products or product lines; 4. Is customer specific for a former customer. 

Price for which the currency of a country can be exchanged for another country's currency.

A business owner's strategic plan to sell his or her investment in a company. An exit strategy gives a business owner a way to reduce or eliminate his or her stake in the business and, if the business is prosperous, make a substantial profit. If the business is a failure, an exit strategy enables the entrepreneur to limit losses.

A payment method commonly used in international trade transactions, whereby the advising bank facilitates payment to the exporter - provided the exporter complies with the terms and conditions of the letter of credit.