"A" credit customers:
Consumers with impeccable credit, who can obtain a loan from traditional lenders.

Acceleration Clause:
Language in a lease that secures payments for the full term of the lease.

Accounts Payable:
The amount of money a company owes for goods and services it has received; any outstanding debt that a company has.

Accounts Receivable:
A collection of a company's outstanding invoices (invoices which have not yet been paid by the company's customers).

Accounts Receivable Aging Report:
A report showing how long invoices from each customer have been outstanding.

Advance Rate:
The percentage of the face amount of an income stream that a funding source will advance to a client.

Articles of Incorporation:
A document filed with a U.S. state by the founders of a corporation. After approving the articles, the state issues a Certificate of Incorporation; the two documents together become the Charter of Incorporation.

Asset:
Anything having commercial or exchange value that is owned by a business, institution or individual. A business' assets might include its real estate, equipment inventory, intellectual assets such as copyrights or trademarks, and accounts receivable.

Assignability:
The ability to assign (or sell) an income stream to another individual or business.

Assignee:
The person or business entity who is given, obtains, or buys the right to an asset.

Assignment:
The transfer of the rights, title or interest of any debt instrument that is properly owned by another party.

Assignor:
The person giving or selling an asset, and subsequently, forfeiting rights to that asset.

"B" through "D" credit customers:
These consumers have less than perfect to bad credit and usually cannot qualify for traditional financing. Also called sub-prime credit customers.

Bad Debt:
Any debt that is delinquent and has been written off as uncollectible.

Balance sheet:
A financial statement that shows a business' current financial condition, with assets on the left side and liabilities and net worth on the right side.

Bankruptcy:
A state of insolvency of an individual or organization. The inability to pay debts.

Bill of Lading:
A shipping document which gives instructions to the company transporting the goods.

Bill of Sale:
A document used to transfer the title of certain goods from seller to buyer.

Business-based income streams:
Cash flow instruments that are paid to a business by another business or government.

Cash flow:
The flow of cash through a business or household. In business terms, cash flow involves the flow of cash into a company in the form of revenues, and out of the company in the form of expenses.

Cash flow broker:
Professional whose primary purpose is to unite income stream sellers with funding sources. They may operate as referral sources or as the primary liaison for cash flow transactions.

Cash flow industry:
The buying, selling, and brokering of privately held debt in the secondary marketplace; the marketplace where businesses and individuals get help managing their cash flow needs.

Cash flow instrument:
Future payment or series of payments. Also called a debt instrument or income stream.

Cash flow specialist:
A cash flow professional who brokers cash flow transactions or buys cash flow instruments.

Cash flow transaction:
Occurs whenever a funding source pays cash to an individual or business in exchange for an income stream.

Collectibility:
Refers to the funding source's ability to collect future income stream payments once they are purchased.

Creditor:
One who is owed payments on a debt by a debtor.

Debt instrument:
Future payment or series of payments, or a debt that one party owes to another party. Also known as income streams or cash flow instruments.

Debtor:
One who owes something and makes payments to a creditor.

Default:
The omission or failure to perform or fulfill a legal duty, obligation, or promise (i.e. to pay a debt).

Due diligence:
Exhaustive research on a transaction, income stream, client, and/or payor. Due diligence may involve credit checks, appraisals, UCC searches, lien searches, or on-site visits with clients.

Factor:
A funding source that specializes in funding accounts receivable.

Factoring:
The purchase of a business' accounts receivable at a discount.

Fictitious name:
A legal statement filed when a person uses a name other than his or her own to operate a business.

Funding source:
An individual investor or an investment company that buys income streams.

Institutional lenders:
Savings and loan associations, local and regional banks, mortgage companies, finance companies, and commercial lenders.

Payee:
Person or business that has the right to receive a payment or series of payments and is interested in selling that income stream for cash. (Also called the seller or client.)

Payor:
The person, company, or government responsible for making payments on an income stream.

Partial:
Any part of a payment stream that is less than the full amount due.

Personal guaranty:
A contractual agreement between a funding source and a seller, whereby the seller assumes personal responsibility and liability for the obligations of the income stream.

Satisfaction:
The discharge of an obligation by paying a party what is due (i.e., the satisfaction of an IRS lien or the satisfaction of a mortgage).

Seasoning:
The length of time payments have been made on a note or other debt instrument.

Secondary market:
The marketplace where individuals and businesses can sell privately held income streams to funding sources for cash.

Securitization:
The bundling and resale of debt instruments to investors; permitted only for parties licensed and regulated by the SEC.

Security interest:
An interest in property, other than real estate, which is given as security for a debt or other obligation. A security interest is created by execution of a security agreement and one or more financing statements under the Uniform Commercial Code.

Seller:
The person or company that is holding a debt instrument and wants to sell it.

Sole proprietorship:
A business owned and operated by an individual.

Subordination:
The act of a creditor acknowledging in writing that a debt due him or her by a debtor shall be inferior to the debt due another creditor by the same debtor.

Title insurance:
Title insurance can benefit either the payor or the payee. Should the beneficiary suffer any damages due to clouded or false title to real estate, title insurance recompenses the damaged party to the extent of the damages.

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