Business Loan Glossary
A searchable glossary of 40+ business lending terms explained in plain language. Browse by category, search by keyword, and click related terms to build your understanding of financing concepts.
Look up any business financing term. Search by keyword or browse by category to find plain-language definitions.
41 terms covering loan types, financial metrics, fees, and the application process.
41 terms shown
Know the terms. Now find the right loan.
A funding specialist can explain how these concepts apply to your specific situation. No impact to your credit score.
Speaking the Language of Business Lending
Business financing comes with its own vocabulary. APR, DSCR, factor rate, UCC filing, holdback, amortization. When a lender uses these terms in a conversation or term sheet, understanding them means you can ask better questions and spot unfavorable terms. This glossary covers the most important concepts in plain language, so you can walk into any lending conversation informed.
Rates and Costs: Know What You Are Paying
The difference between APR, interest rate, factor rate, and effective APR trips up many borrowers. An interest rate is just the cost of borrowing the principal. APR includes fees. A factor rate multiplies the advance amount to determine total repayment. Effective APR shows the true cost after all fees reduce your net proceeds. Our total cost of capital calculator and factor rate converter translate between these numbers so you can compare offers on a level playing field.
Financial Metrics Lenders Care About
DSCR (debt service coverage ratio) tells a lender whether your cash flow can cover the loan payment. Working capital shows if you can handle short-term obligations. DTI (debt-to-income ratio) indicates how much of your income already goes to debt. Each metric tells the lender something different about your financial health. Use our DSCR calculator and working capital calculator to check where you stand before applying.
Understanding Loan Types
Not all financing works the same way. Term loans give you a lump sum with fixed payments. Lines of credit let you draw and repay as needed. Equipment financing uses the equipment as collateral. MCAs advance cash against future revenue. Each has different costs, requirements, and tradeoffs. Take our loan finder quiz to see which type fits your situation, or talk to a funding specialist for personalized guidance, with no impact to your credit score.
How It Works
Search or Browse
Type a keyword to search, or tap a category to filter terms by topic.
Read the Definition
Each term has a plain-language explanation of what it means and why it matters for borrowers.
Explore Related Terms
Click related terms to jump between connected concepts and build your understanding.
What You Get
Plain-Language Definitions
Every term explained in simple, clear language without jargon or legalese.
Category Filtering
Browse by loan types, financial metrics, costs and fees, application terms, collateral, or repayment.
Keyword Search
Find any term instantly by typing a keyword. Searches term names, definitions, and categories.
Related Terms
Each definition links to related concepts so you can build a complete picture.
Alphabetical Organization
Terms grouped by letter for quick browsing when you want to scan the full list.
40+ Terms Covered
From APR to Working Capital, covering the most important concepts for business borrowers.
Business Loan Glossary — Frequently Asked Questions
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Loan Finder Quiz
Answer 5 quick questions and get a personalized loan recommendation matched to your business needs.
Use ToolFactor Rate to APR Converter
Convert factor rates to APR to understand the true annual cost of merchant cash advances and short-term loans.
Use ToolDSCR Calculator
Calculate your Debt Service Coverage Ratio to see if your business can handle new loan payments.
Use Tool