Every industry has jargon, and while it might not matter to you if you speak the language of your dentist, you are going to want to make sure you understand the language when it comes to your finances. While money and finances are pieces of most day to day lives, especially those of a business owner, many terms go entirely misunderstood. In our blog post today we’re going to cover four of the most commonly misunderstood financial terms.

Bankruptcy

It’s a commonly used term, but very few people actually understand what bankruptcy means. Though many people think it means having absolutely no money whatsoever, the true definition is a little bit different. Bankruptcy is when a borrower, whether it’s an individual or a company, is unable to repay their debts. In this instance, they are considered bankrupt. The process itself requires the borrower to sell off assets, like their house, business or car, in order to pay back the debt owed.

Factoring

Financial Carrier Services specializes in factoring! Yet many of our clients aren’t aware that our services are associated with this financial term. Factoring is a way for a company or a business to acquire the funds that they need to stay afloat. It’s an easy way to get fast cash for paying employees, taking care of benefits, purchasing new equipment, and the like. The money that is paid out at this point is invoiced and will be paid back by the borrower.

Accounts Receivable

This is one of the most frequented terms when talking finances, but do people really know what accounts receivable means? Most people assume that it’s a department within a business, but it’s more than that. Accounts receivable refers to any money that is owed to you by your clients. This will vary from business to business, but at the end of the day, it is any invoices that include an amount due and a date to pay by.

Rating

Paying debts is something that’s taken very seriously, and when you are a borrower, you work towards having a high rating. This term refers to the ability of a company repaying their debts. As a company, having a high rating is crucial. Most businesses will need to borrow money more than once, and with a low rating, the chances of you finding a lender can be difficult.

Work With Financial Carrier Services

Finance is something that our team is passionate about, but we’re also dedicated to ensuring that any and all business we work with have the funds that they need to continue. We hope that covering some of these terms has improved your understanding of them and how they play a part in your business.

If you’re in need of freight factoring, contact our team today. We would love to be a part of your journey and are grateful for any opportunity to help you succeed. Browse our services and reach out if you have any questions or would like to begin the freight factoring process.