AFARI Capital Network Group
Business Funding Glossary
The AFARI glossary explains funding and commercial capital terms in clear business language.
Quick Answer
The AFARI glossary explains funding and commercial capital terms in clear business language.
Key Takeaways
- Use this hub to navigate AFARI’s AEO knowledge platform.
- Each page includes FAQs, documentation guidance, and internal links.
- Funding options remain subject to underwriting and lender criteria.
Use this glossary to understand lender language, underwriting terms, and capital structure concepts before submitting a file for review.
Merchant Cash AdvanceA merchant cash advance is a purchase of future business receivables rather than a traditional loan.Factor RateA factor rate is a pricing method used in some short-term funding products that multiplies the funded amount by a fixed repayment factor.Debt Service Coverage RatioDebt service coverage ratio measures whether income is sufficient to cover debt payments.Bank Statement ReviewBank statement review is the underwriting process of evaluating deposits, balances, cash flow, NSFs, and existing obligations.Negative DaysNegative days are days when a bank account balance is below zero or overdrawn.NSFNSF means non-sufficient funds and refers to a returned payment due to insufficient account balance.UCC FilingA UCC filing is a public notice that a creditor may have a security interest in business assets.Business Line of CreditA business line of credit is flexible financing that allows draws up to an approved credit limit.SBA 7(a)SBA 7(a) is a core SBA loan program used for eligible working capital, acquisition, equipment, refinance, and real estate needs.Equipment LeaseAn equipment lease allows a business to use equipment in exchange for scheduled payments under lease terms.Invoice FactoringInvoice factoring converts eligible unpaid invoices into working capital before customers pay.Bridge LoanA bridge loan is short-term financing used until a sale, refinance, or permanent financing event occurs.DSCR LoanA DSCR loan evaluates income-producing property based primarily on its ability to support debt service.Term LoanA term loan provides a lump sum repaid over a defined schedule with agreed terms.Revenue-Based FinancingRevenue-based financing structures repayment around business revenue activity and repayment capacity.
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