Everyone knows issuing stock options and warrants is a great way to compensate employees and contractors for a job well done. These methods of compensation have been embraced by the startup community as a way to reward others without using up their much-needed cash. Issuing options and warrants to customers is a less common practice …
LIBOR stands for London Interbank Offered Rate and is the average interest rate at which major global banks lend to one another. For the past few decades, it has been the benchmark interest rate for consumer loans worldwide, such as credit cards, car loans, adjustable-rate mortgages, and business loans as well as investment instruments such …
Monthly financial reports are a management way of obtaining a concise overview of the previous month’s financial wellbeing and performance. When reviewing these reports, there are common ratios that can give you insight into your company’s liquidity, financial leverage, and the overall efficiency of assets used, which can help when making future plans and decisions. One of …
Generally, when your business requires outside financing, there are two different sources of funds, debt financing or equity financing. Both methods of financing can have a significant impact on your business and should be considered carefully. Debt Most of us are familiar with debt, whether you have had a credit card, taken out a student …
During an audit, one thing that will be evaluated is your company’s ability to continue as a going concern. In layman’s terms, this means: will your company be able to stay in business in the near future? Making this determination is oftentimes not black and white, and there are several factors that both management and …
When companies are approved for a bank loan or line of credit, the loan agreement often contains certain affirmative and negative debt covenants. Debt covenants are conditions that the borrower must comply with in order to adhere to the terms of the loan agreement. Essentially, debt covenants bind a business to specific types of behavior …
Asset-based financing, though once considered a financing option of last resort, is now a popular choice for companies that are highly leveraged with debt or do not have a long credit track record for traditional financing. The main difference between asset-based financing and other traditional types of lending is that asset-based financing is secured by …