A B C D E F G I L M P R S T U W

A

APR (Annual Percentage Rate)
The total yearly cost of borrowing money, including interest and fees, expressed as a percentage. APR helps businesses compare the true cost of different financing options.
Example: A working capital loan with a 15% APR will cost $1,500 in interest and fees annually for every $10,000 borrowed.
Accounts Receivable
Money owed to your business by customers for goods or services already delivered but not yet paid for. Common in B2B transactions and logistics/trucking in the Borderplex region.
Example: An El Paso trucking company has $50,000 in accounts receivable from shipping contracts that will be paid in 30-60 days.
Asset-Based Lending
Loans secured by business assets such as inventory, equipment, real estate, or accounts receivable. Popular for El Paso manufacturers and warehouse operators.

B

Bridge Loan
Short-term financing used to cover immediate expenses while waiting for long-term funding or revenue. Common for construction contractors in El Paso needing to pay for materials upfront.
Example: A contractor secures a $75,000 bridge loan to purchase materials while waiting for the client's construction draw payment.
Borderplex
The binational economic region encompassing El Paso, TX, Juárez, Mexico, and southern New Mexico (Santa Teresa). A major trade corridor with unique business financing needs.

C

Cash Flow
The total amount of money moving in and out of your business. Positive cash flow means more money coming in than going out. Critical for seasonal El Paso businesses like restaurants and tourism.
Collateral
Assets pledged to secure a loan, which the lender can seize if you default. Can include equipment, inventory, real estate, or accounts receivable.
Example: A warehouse operator uses their $200,000 property as collateral for a $150,000 equipment loan.
Credit Score (Business)
A numerical rating (0-100) that reflects your business's creditworthiness based on payment history, credit usage, and public records. Different from personal credit scores.

D

Debt Service Coverage Ratio (DSCR)
A measure of your business's ability to repay debt. Calculated by dividing net operating income by total debt obligations. Lenders typically want to see DSCR above 1.25.
Example: If your business has $120,000 annual income and $80,000 in debt payments, your DSCR is 1.5 ($120K ÷ $80K).
Daily Remittance
A repayment structure where a percentage of daily credit card sales or revenue is automatically deducted to repay financing. Common with revenue-based financing and MCAs.

E

Equipment Financing
Loans or leases specifically for purchasing business equipment. The equipment itself serves as collateral. Popular for El Paso manufacturers, restaurants, and medical practices.

F

Factor Rate
A decimal multiplier (typically 1.1 to 1.5) used to calculate the total repayment amount for merchant cash advances and some short-term loans. NOT an interest rate.
Example: Borrowing $10,000 with a 1.3 factor rate means you'll repay $13,000 total (1.3 × $10,000 = $13,000).
Factoring (Invoice Factoring)
Selling your unpaid invoices to a factoring company at a discount in exchange for immediate cash. Extremely popular with El Paso logistics and trucking companies.
Example: An El Paso logistics company sells a $50,000 invoice (payment due in 60 days) to a factor for $47,000 cash today.

G

Gross Revenue
Total income from all business activities before deducting any expenses. Used by lenders to assess business size and capacity to repay loans.

I

Invoice
A bill sent to a customer requesting payment for goods or services provided. The foundation of invoice factoring and accounts receivable financing.

L

Line of Credit
A flexible loan allowing you to borrow up to a set limit, pay it back, and borrow again. You only pay interest on what you use. Ideal for managing seasonal cash flow.
Example: An El Paso restaurant with a $25,000 line of credit borrows $10,000 in December for holiday inventory, pays it back in January, then borrows $8,000 in March.
LTV (Loan-to-Value Ratio)
The percentage of an asset's value that a lender will finance. For example, 80% LTV on $100,000 equipment means the lender will provide $80,000.

M

Merchant Cash Advance (MCA)
A lump sum payment in exchange for a percentage of future credit card sales. Fast but expensive. Common for restaurants and retail businesses with high card volume.
Example: A restaurant receives $20,000 and repays it by giving the MCA provider 15% of daily credit card sales until $26,000 is repaid.

P

Personal Guarantee
A promise by the business owner to personally repay the loan if the business cannot. Makes the owner personally liable for business debt.
Prime Rate
The interest rate banks charge their most creditworthy customers. Many business loan rates are set as "Prime + X%". As of 2026, prime rate is typically 8-9%.

R

Revenue-Based Financing (RBF)
Financing repaid through a fixed percentage of monthly revenue. Payments fluctuate with sales—higher in good months, lower in slow months. Popular with El Paso tech startups and seasonal businesses.
Example: A business borrows $50,000 and repays 8% of monthly revenue until $65,000 is repaid. In a $30K month, payment is $2,400; in a $15K month, payment is $1,200.
Recourse vs. Non-Recourse Factoring
Recourse factoring means you're responsible if your customer doesn't pay the invoice. Non-recourse means the factoring company assumes that risk (but charges higher fees).

S

SBA Loan
Small Business Administration loans guaranteed by the federal government. Lower rates and longer terms than conventional loans, but slower approval process (30-90 days).
Seasonal Business
A business with significant revenue fluctuations based on time of year. Common in El Paso tourism, agriculture, and construction sectors. Requires specialized financing solutions.

T

Term Loan
A traditional loan with a fixed amount, interest rate, and repayment schedule. Paid back in regular installments over a set period (1-10 years).
TILA (Truth in Lending Act)
Federal law requiring lenders to disclose the true cost of credit, including APR and total repayment amount. Protects borrowers from hidden fees.

U

Underwriting
The process lenders use to evaluate loan applications and determine creditworthiness. Includes reviewing credit scores, revenue, bank statements, and business history.
UCC Filing (Uniform Commercial Code)
A public notice that a lender has a security interest in your business assets. Common with equipment loans and asset-based lending.

W

Working Capital
The funds available for day-to-day business operations. Calculated as current assets minus current liabilities. Essential for managing cash flow gaps in the Borderplex economy.
Example: An El Paso logistics company with $100,000 in assets and $60,000 in short-term debts has $40,000 in working capital.
Working Capital Loan
Short-term financing (3-18 months) used to cover operational expenses like payroll, inventory, or rent. Not for long-term investments or equipment purchases.
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