Access to Capital

Variable costs in your business are directly related to the sale of goods and services. Unlike fixed costs (like overhead), variable costs change over time. Examples of variable costs include shipping, raw materials, and labor. As sales increase, variable costs increase.

Turnover is the number of times that an average inventory of goods is sold during a fiscal year, or some other designated time period. You may need to calculate turnover as part of your preparation for loan applications. Learn more about what you might need to collect for a loan application.

The total amount of money, including interest, that you need to pay your lender by the end of your payment period is the loan payoff amount.

Your liabilities include any debts you owe, including loan debt.

You can borrow money based on your existing inventory. As you sell the inventory, you use your revenue to pay the loan. Some inventory financing companies will provide you with cash up front to purchase inventory.

Merchandise that is purchased and/or produced and stored for eventual sale

An interest rate is the percentage of money paid by the borrower to use the money provided by a the lender. Normally, loan interest is expressed in APR, which is the interest rate compounded monthly.

In an installment loan, the interest amount is included in the principal loan amount, and the borrower repays the debt periodically.

Insolvency is the inability of a borrower to meet financial obligations with the lender(s) as payments become due. Insolvency may result in legal actions and assets may be liquidated to pay debts. The lender's rights in insolvency proceedings are included in the documentation of the original loan.

An income statement (also known as a 'profit and loss' statement) tallies the total revenue, expenses, gains, and losses. This statement shows you where money is moving in and out of your business. Over time, your income statements can be taken together to help you forecast future earnings and spending.