Invoice finance
Funding linked to unpaid B2B invoices. It may help release cash tied up in completed work while customers are still within payment terms.
Invoice finance guideCommercial finance glossary
Commercial finance terms, explained simply
A plain-English glossary for UK business funding terms across invoice finance, asset finance, loans, acquisition finance and property-backed funding.
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These definitions are a starting point, not financial advice. Jolt Funding is a credit broker, not a lender, and funding is subject to lender criteria and individual circumstances.
Funding products
Asset finance
Funding used to buy or refinance business assets such as vehicles, machinery, equipment or technology.
Asset finance guideBusiness loan
A loan for business purposes such as working capital, stock, VAT, payroll, expansion or project costs.
Business loans guideAcquisition finance
Funding used to support buying a business, completing a management buyout, or funding part of a business purchase.
Acquisition finance guideCommercial mortgage
Longer-term borrowing secured against commercial property, often used to buy, refinance or raise funds against premises.
Commercial mortgage guideBridging finance
Short-term property-backed funding where timing, security and a clear repayment route are important.
Bridging finance guideDevelopment finance
Funding for build, conversion or refurbishment projects, often released in stages as works progress.
Development finance guideMezzanine finance
Specialist funding that may sit behind senior debt on some property or acquisition structures where extra capital is needed.
Mezzanine finance guideRevolving credit facility
A flexible facility where a business may draw, repay and redraw funds within agreed limits.
Overdraft
A short-term bank facility allowing a business current account to go overdrawn up to an agreed limit.
Merchant cash advance
Funding usually repaid as a percentage of card takings. Suitability depends on trading pattern, cost and affordability.
Trade finance
Funding that may support buying, importing or supplying goods where cash is tied up before customer payment is received.
Invoice finance terms
Factoring
An invoice finance facility where the funder may manage collections or credit control as part of the arrangement.
Invoice discounting
An invoice finance facility where the business may keep more control over customer collections, subject to lender criteria.
Selective invoice finance
Funding against selected invoices rather than the full debtor book. Availability depends on invoice quality and funder appetite.
Debtor book
The list of customers that owe money to the business for invoices already raised.
Aged debtor report
A report showing unpaid invoices grouped by how long they have been outstanding.
Customer concentration
The level of reliance on one or a few customers. High concentration may affect how an invoice finance facility is assessed.
Recourse
A facility where the business may remain responsible if the customer does not pay an invoice after an agreed period.
Non-recourse
A facility that may include bad debt protection for approved customers, subject to terms, exclusions and limits.
Credit control
The process of chasing and managing customer payments.
Assignment of invoices
The legal transfer of rights over invoices to a funder as part of an invoice finance arrangement.
Asset finance terms
Hire purchase
A funding structure where the business usually pays in instalments and may own the asset after final payment.
Finance lease
A lease structure where the business uses the asset for an agreed term while making regular payments.
Operating lease
A lease that may suit assets used for a period without the business necessarily owning them at the end.
Balloon payment
A larger payment due at the end of some asset finance agreements, often used to reduce regular repayments.
Residual value
The estimated value of an asset at the end of a finance or lease term.
Asset refinance
Raising funds against equipment, vehicles or other assets the business already owns or partly owns.
Property funding terms
LTV
Loan to value: the borrowing amount compared with the value of the property or asset.
GDV
Gross development value: the expected value of a property development when complete.
LTGDV
Loan to gross development value: borrowing compared with the expected completed value of a development project.
LTDC
Loan to development cost: borrowing compared with the total cost of a development project.
Exit route
The planned way a short-term or project facility will be repaid, such as sale, refinance or another confirmed facility.
Valuation
An assessment of a property or asset value, often required before secured lending is finalised.
Planning permission
Formal consent for a property development or change of use. Planning status can strongly affect development finance.
Drawdown
The release of funds from an agreed facility. Development finance may use staged drawdowns.
Monitoring surveyor
A professional who may review progress, costs and works on a property development for a lender.
Practical completion
The point at which construction works are considered complete enough for handover or occupation, subject to contract details.
Second charge
A secured loan ranking behind a first charge lender on the same property or asset.
Refinance
Replacing an existing facility with a new one, often to change term, rate, structure or release capital.
Acquisition finance terms
Management buyout
A transaction where the existing management team buys the business they run.
Management buy-in
A transaction where an external management team buys into and takes over a business.
Deferred consideration
Part of a purchase price paid after completion, often subject to agreed terms.
Earn-out
A purchase structure where some payment depends on future business performance.
Vendor loan note
A seller-backed loan arrangement where part of the purchase price is left outstanding and repaid over time.
Heads of terms
A document setting out the main terms of a proposed deal before full legal agreements are finalised.
Due diligence
The review of a target business before completion, often covering accounts, legal, tax, commercial and operational matters.
Completion accounts
Accounts prepared around completion to confirm the financial position of the business being bought.
Assessment and affordability terms
Affordability
The ability of the business to meet repayments based on income, costs, existing borrowing and lender criteria.
Cash flow
The movement of money in and out of a business. Cash flow pressure is a common reason for funding enquiries.
Turnover
Total sales or revenue over a period before costs are deducted.
Gross profit
Revenue minus direct costs of delivering goods or services.
Net profit
Profit after overheads and other costs have been deducted.
EBITDA
Earnings before interest, tax, depreciation and amortisation. It may be used to understand operating performance.
Management accounts
Internal accounts used to show recent trading performance between filed annual accounts.
Bank statements
Records of account transactions that lenders may review to understand trading, cash flow and conduct.
Credit search
A check of credit records. The type of search and its impact depend on the lender and process used.
Debt service cover
A measure of whether income is enough to cover debt repayments with a suitable margin.
Security and legal terms
Security
Assets or rights a lender may rely on if borrowing is not repaid as agreed.
Collateral
An asset pledged to support borrowing, such as property, equipment, vehicles or invoices.
Debenture
A form of security a lender may take over company assets.
Personal guarantee
A commitment from an individual to repay borrowing if the business cannot meet its obligations.
Fixed charge
Security over a specific asset, such as property or equipment.
Floating charge
Security over changing business assets, such as stock or receivables.
Covenant
A condition in a finance agreement that the borrower must comply with.
Term sheet
A summary of proposed finance terms before full documents are completed.
Commercial Finance Glossary FAQs
Is this glossary financial advice?
No. It is a plain-English reference. Funding decisions should be made carefully and depend on lender criteria and individual circumstances.
Which term matters most when applying?
The useful terms depend on the route. Invoice finance often starts with the debtor book; property funding often starts with value, security and exit route; acquisition finance often starts with deal structure.
Can one enquiry cover several terms or routes?
Yes. One enquiry can cover invoice finance, asset finance, business loans, acquisition finance and property-backed funding if the need is mixed.