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BUSINESS FINANCING GLOSSARY

Cash Flow

The net movement of money in and out of your business over a period. Positive, steady cash flow is what most cash-flow lenders underwrite to.

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Related terms

Accounts Payable (AP)→Money your business owes to suppliers and vendors for goods or services bought on credit. It sits on the balance sheet as a short-term liability.Current Ratio→Current assets divided by current liabilities. Above 1.0 means you can cover short-term obligations — a quick read on liquidity.Quick Ratio→A stricter liquidity test: (current assets minus inventory) divided by current liabilities. Shows if you can pay bills without selling stock.Working Capital→The cash available to run day-to-day operations — current assets minus current liabilities. The fuel for payroll, inventory, and growth between paydays.Bank Statements→Monthly records of your business checking activity. Lenders read 3–6 months of them to verify revenue, cash flow, and account health — often the only “document” needed to start.EBITDA→Earnings Before Interest, Taxes, Depreciation, and Amortization — a proxy for operating cash flow used to value businesses and gauge debt capacity.

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