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Access to Finance financial glossary

Boost’s specialist Access to Finance team has prepared a financial glossary to help business owners and decision makers understand common financial terminology in relation to scaling, growing and starting a business. If you want to find out more information, please contact our specialist team on 0800 488 0057.

Financial glossary for scaling businesses

Revenue based funding

A type of financial capital provided to small or growing businesses in which investors inject capital into a business in return for a fixed percentage of ongoing gross revenues.

Convertible loan notes

A convertible loan note (CLN or convertible note) is a short-term loan that is converted into equity at an agreed future date. CLNs enable investors to buy equity at a discounted rate. 

Equity investment

Equity investment refers to the capital an external investor injects into your business in return for a share of ownership.

Business angels

Business angels are private individuals who invest their own money into startup or early-stage businesses in exchange for a share of the company’s equity.

EIS and SIES schemes 

Seed Enterprise Investment Scheme (SIES) is a government tax-relief schemes that incentivise private individuals (business angels) to invest in very early-stage businesses by way of seed funding. This scheme allows any individual to invest up to £200,000 every tax year and receive a 50% tax break. Limits are set on how much a business can raise using this method. Enterprise Investment Scheme (EIS) supports larger and more established businesses, with up to seven years trading
history and 250 employees.

Crowdfunding

Where many individuals (‘the crowd’) typically via an online platform invest in an early-stage business, in exchange for shares (equity) in that company. Individual investors become shareholders. 

Venture capital

Venture capital is a form of capital to support startups and other businesses with the potential for substantial and rapid growth.

Initial public offerings

An initial public offering (IPO) is a public offering in which shares of a company are sold to institutional investors and then usually onto retail investors. An IPO is typically underwritten by investment banks, who also arrange for the shares to be listed on one or more stock exchange.

Financial glossary for growing businesses

Overdrafts

An agreed line of credit that can be borrowed via a business current account.

Business credit cards

Also known as corporate credit cards, work in the same way as a personal credit card and have a set credit limit. Balances can be rolled over from one month to the next and will incur interest. 

Term loans

A traditional business loan is a lump sum of capital that you pay back with regular repayments, typically with a fixed interest rate.

Peer-to-peer loans

Peer-to-peer lending aims to bring together a large number of private investors (individuals, businesses or institutions) to lend to businesses, usually through an online platform. The intention is that lenders and borrowers get a better rate then they would through banks, with largely automated credit decisions.

Merchant cash advance

Designed for retail businesses. Businesses who take regular payments through a card terminal, can use recent takings as the basis for this kind of in.

Stock finance

Also known as inventory finance – a lending product that allows businesses to borrow capital against the value of their stock.

Trade finance

Designed for wholesalers, distributor and importers. Trade finance provides the cash to buy inventory or stock from a supplier, to fulfil an order.

Invoice finance

Invoice finance allows your company to borrow money against outstanding invoices. Invoice finance lets you borrow up to 95% of the value of your unpaid invoices.

Asset finance

Asset finance is a form of lending you can use to buy business assets which are critical to the successful running of your company, such as machinery and vehicles.

Commercial mortgages

Medium to long-term loans that can be used to fund the purchase of business premises.

Bridging loans

A short-term loan (usually less than 12 months) made to a business until either this loan can be cleared in full, or a more permanent source of funding secured. 

Development finance

Loans used to support the costs associated with a residential or commercial development project.

Financial glossary for new businesses

Startup funding

A startup loan is a loan designed to help new businesses launch and grow.

Grant funding

Funding that does not need to be paid back but may require matched funding to access. Grant funding is typically awarded to businesses involved in some aspect of innovation.

Innovator funding

A UK Home Office scheme that encourages overseas investors to found and invest in UK businesses by way of equity for a visa to reside in the UK.

Speak to a Boost Access to Finance specialist

The Boost Access to Finance service is for ambitious businesses with desire to grow, invest, create jobs and / or innovate and trade internationally. Whether you are looking to secure investment, seeking a loan, planning an acquisition or starting a new venture our team can help.

Contact our team on 0800 488 0057 to speak to a specialist.

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