Assets - Anything of value. Any interest in real or personal property which can be appropriated for the payment of debt.

Bridging Loan - Short-term loan to provide temporary financing until more permanent financing is available.

Capitalization - 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.

Cash Flow Financing - Short-term loan providing additional cash to cover cash shortfalls in anticipation of revenue, such as the payment of receivables.

Collateral - Assets pledged to secure the repayment of a loan.

Covenant - 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.

Current Asset - Assets that will normally be turned into cash within a year.

Debt Service - Amount of payment due regularly to meet a debt agreement; usually a monthly, quarterly or annual obligation.

Debt Service Reserve - Term used to refer to cash reserves set aside by a borrower, either by internal policy or lender covenant, to repay debt in the event that cash generated by operations is insufficient.

Default - A failure to discharge a duty. The term is most often used to describe the occurrence of an event that cuts short the rights or remedies of one of the parties to an agreement or legal dispute, for example, the failure of the mortgagor to pay a mortgage installment, or to comply with mortgage covenants.

Delinquent - In a monetary context, something that has been made payable and is overdue and unpaid.

General Recourse - Rights to demand payment from the general assets of the debtor, without seniority in access to any specific assets.

Guaranteed Loan - A pledge to cover the payment of debt or to perform some obligation if the person liable fails to perform. When a third party guarantees a loan, it promises to pay in the event of a default by the borrower.

Interim Financing - Short-term loan to provide temporary financing until more permanent financing is available.

Intermediaries - Non- or for-profit institutions that have specialized lending capacities. They obtain capital in the form of equity and low interest loans from a variety of sources, including foundations and other funders, to form a "lending pool." They then serve as "wholesalers" who process large numbers of small loans or investments. This "economy of scale" often allows intermediaries to be more efficient than a foundation or funder could be if it considered each investment individually. Also, intermediaries often develop expertise in a particular field or region that foundations or funders cannot afford to develop. In the context of this study, non-financial intermediaries include community foundations and financial intermediaries include credit unions, venture capital and loan funds, banks, etc.

Loan Agreement - A written contract between a lender and a borrower that sets out the rights and obligations of each party regarding a specified loan.

Negative Covenants - Statements of actions or events of the borrower must prevent from occurring or existing, for example, additional borrowing without the lender's consent.

Principal - In commercial law, the principal is the amount that is received, in the case of a loan, or the amount from which flows the interest.

Receivables - Accounts receivable; an amount that is owed the business, usually by one of its customers as a result of the ordinary extension of credit,

Recoverable Grants - Funds provided by a philanthropist to fulfil a role similar to equity. A recoverable grant may include an agreement to treat the investment as a grant if the enterprise is not successful, but to repay the investor if the enterprise meets with success.

Restructure - A revision of a financial agreement that alters the conditions or covenants of the original agreement. For example, parties may agree to restructure a loan agreement, easing the payment schedule, when a borrower is delinquent or otherwise faces default on a loan.

Roll Over - Prior to or at the time of the maturity of an investment or loan, the interested parties agree to continue to carry over the investment or loan for another, successive period of time.

Security - A pledge made to secure the performance of a contract or the fulfilment of an obligation. Examples of securities include real estate, equipment stocks or a co-signer. Mortgages are a form of security with strong legal standing, because they are publicly registered following a formal legal procedure. A mortgage gives the lender holding a mortgage security the right to reclaim the asset being financed, if repayment is not made.

Senior Debt - Debt that must be repaid before subordinated debt receives any payment in the event of default.

Junior Debt - Debt over which senior debt takes priority. In the event of bankruptcy, subordinated debt-holders receive payment only after senior debt is paid in full. A subordination of security interest in property allows another creditor to have the rights to the proceeds of the sale of that property before the claim of the subordinated creditor.

Term - Refers to the maturity or length of time until final repayment on a loan, bond, sale or other contractual obligation.

Warranties - Statement attesting that certain statements are true. For instance, the borrower may warrant that it is a corporation, that it is entering into the agreement legally and that financial statements supplied to the bank are true.

Write off - When an investment, such as a loan, becomes seriously delinquent or in default and is determined to be uncollectible, the lender may choose to charge the outstanding investment amount as an expense or a loss.