Accelerated payments are a strategy for saving interest costs by repaying a loan sooner, through larger, more frequent or extra payments.
Accounting Standards for Private Enterprises (ASPE) are widely used accounting principles for private companies in Canada.
Money a business owes to suppliers for goods or services already received.
Money owed to a business by its customers for goods or services already delivered.
An accounting method that records revenue when earned and expenses when incurred, not when cash moves.
Accrual cash accounting is an accounting method that records revenue and expenses when they are earned or incurred, regardless of when the actual cash transaction occurs.
Accrued expenses are costs a company has incurred, but has not yet received an invoice.
Interest that has built up on a balance but has not yet been paid.
The acid-test ratio (or quick ratio) is calculated by dividing a company's quick assets by its current liabilities. It helps assess a company's ability to pay its short-term obligations.
Administration expenses are the costs of running a business that are not directly tied to production or sales activities, such as office supplies and salaries for administrative staff.
In asset-based lending or factoring, the percentage of an asset’s value that a lender will advance (for example, 80% of eligible invoices).
An advisory board is a group of experts who provide informal guidance to a company's management team to help improve the business.
A written statement confirmed by oath or affirmation, sometimes used to verify facts in a transaction.
The gradual paydown of a loan balance through scheduled payments over time.
The loan amortization period is the length of time required to repay a loan in full, including both its principal and interest.
A table showing each payment’s split between principal and interest over the life of a loan.
An angel investor is a wealthy individual who invests personal money in early-stage companies.
A standardized way to express borrowing cost over a year, including interest and certain fees.
A professional estimate of an asset’s value, often used to support financing.
Anything of value owned by a business, such as cash, equipment, or receivables.
An asset-backed security is a type of investment that's backed by a pool of income-generating assets.
Financing primarily secured by business assets like receivables, inventory, or equipment.
Assets refer to everything a company owns, from cash to equipment to intellectual property. On a balance sheet, they are divided into current and long-term assets.
Audited, accountant-reviewed, and notice-to-reader are three types of financial statements used to confirm a company's financial status.
The average collection period is the average number of days it takes a business to collect and convert its accounts receivable into cash.
A balance sheet summarizes a company’s assets, liabilities and shareholders’ equity at a specific point in time. It is one of the fundamental documents that make up a company’s financial statements.
A larger payment due at the end of a loan or lease term after smaller regular payments.
A balloon loan is a type of loan with small regular payments, followed by a large final lump (balloon) payment at end of the term.
Bank debt is the money a company owes to banks for loans or lines of credit taken out for financing purposes.
A legal process where an individual or business that cannot pay its debts seeks relief under insolvency laws. It can significantly impact credit and lender decisions.
A record of account activity that shows deposits, withdrawals, and balances.
Barriers to trade are financial or technical obstacles that hinder international commerce and are often addressed through free trade agreements.
One hundredth of a percentage point (0.01%), often used to describe rate changes.
The bill of lading is a legally enforceable document summarizing the terms and conditions for a specific shipment. It is an agreement between the shipping customer, or a third party, and the carrier.
A document that confirms an asset was sold and ownership transferred.
A security interest that covers multiple assets of a borrower rather than a single item.
Blended payments combine equal monthly principal and interest amounts. While they offer predictability, they do result in higher total interest.
A group of people that provides expertise for a company or organization. The board of directors offers high-level overall direction and strategy for the organization and protects the financial interests of investors.
A bonded warehouse is a warehouse under customs supervision where businesses can store imported or exported goods without paying customs duties until the goods are released.
The person or business that receives funds and agrees to repay under set terms.
An estimate of how much a borrower can responsibly repay based on income, cash flow, and obligations.
The break-even point is the level of sales where a business’s total revenue equals its total expenses.
Bridge capital is temporary funding that helps a business cover its costs until it can get permanent capital from equity investors or debt lenders.
Short-term financing used to cover a temporary gap until longer-term financing is available or an expected cash event occurs.
A fee charged by a broker for arranging financing or leasing.
A business accelerator is a program that gives developing companies access to mentorship, investors, and other support to help them become stable and self-sufficient.
A business bank account is a bank account for companies. It is opened in the name of a business, and it is used for business-related transactions rather than personal finances.
A business incubator is a program that gives very early-stage companies access to mentorship, investors and other support to help them get established.
A business accelerator is a program that gives developing companies access to mentorship, investors, and other support to help them become stable and self-sufficient.
Business-to-business refers to sales and purchasing activities between companies.
The amount required to purchase or pay off an asset or contract before the scheduled end.
A federal loan program that helps small businesses access financing by sharing risk with lenders for eligible asset purchases and improvements.
Capital cost allowance (CCA) is a tax deduction that allows businesses to gradually write off the cost of depreciable assets like equipment or building over time to reduce their taxable income.
Money spent to buy or improve long-term assets like equipment or vehicles.
Capital structure refers to how much of a company's money comes from creditors versus owners and helps to reveal the cost of using that capital.
Carbon capture and storage is a technology that captures pollution in the form of carbon dioxide (CO2) and converts it into a stable form for long-term storage.
Cash refers to the money a business has at its disposal, either on hand or in easily-accessible bank accounts.
The movement of money in and out of a business over a period of time.
A forward-looking estimate of expected cash inflows and outflows.
A cash flow statement is a key financial statement that records the amount of cash that comes into and goes out of a company over a specific period.
A cash position is the amount of cash that a company has on its books at a specific point in time.
Cash runway refers to the length of time a company can continue operating before it runs out of cash, based on its current rate of expenditure and available cash reserves.
Change management is a structured approach that allows a company to adapt to and capitalize on new business realities.
A reversal of a payment (often card-related) or a disputed transaction amount that is taken back. In finance, chargebacks can affect cash flow and receivables quality.
When a lender treats a debt as unlikely to be collected for accounting purposes.
Climate finance refers to financing drawn from public, private and alternative sources that supports climate change mitigation and adaptation actions.
Climate resilience involves preparing for and adapting to the changing climate to ensure long-term business viability and success.
Fees and expenses due to finalize a financing transaction.
An asset pledged to support a loan or lease and reduce lender risk.
A service that collects and reports business credit information and payment history.
A commercial letter of credit is a bank document that guarantees your supplier will be paid.
A document confirming a lender’s intent to fund, subject to stated conditions.
A commodity is a basic good or service, such as wheat, oil and freight, that can be easily exchanged with another of the same kind from around the world.
Common shares are a type of share that gives shareholders partial ownership of a company and voting rights.
A competitive advantage is anything that gives a business an edge over its competitors.
Competitive forces are anything that threaten a company's ability to grow and be profitable.
Items that must be completed before a lender will fund, such as documents or approvals.
A confidential information memorandum (CIM) shares key information about a company’s operations, financials and value with potential buyers.
Contract employment is a work arrangement where workers are hired for a specific period or project but do not receive the same benefits as permanent employees.
The length of time an agreement is in effect.
The contributed surplus (or additional paid-in capital) is the money a company raises from issuing shares above their stated par value.
Controlling interest is a term for a shareholder owning a majority of a company’s voting shares, giving them the power to make key decisions and direct the company.
In the context of a website, a conversion rate is the percentage of visitors who take a desired action. For example, the percentage of visitors buying a product or service, registering a membership or downloading a catalogue. It is calculated by dividing the number of actions completed by the total number of site visitors.
With convertible debt, a business borrows money from a lender or investor where both parties enter the agreement with the intent (from the outset) to repay all (or part) of the loan by converting it into a certain number of its preferred orcommon shares at some point in the future. The agreement specifies the repayment and conversion terms which include the timeframe and the price per share for the conversion as well as the interest rate that will be paid until either conversion or maturity.
A cooperative is a legally incorporated company. It is created by individuals or companies that come together to satisfy common needs.
Copyright is a legal right that gives creators exclusive control over their original works, and prevents others from using or reproducing them without permission.
Corporate governance is the system of rules, practices, and processes put in place to guide how a company is directed and controlled.
A promise by a company to repay if another party under the deal does not.
CSR is based on the belief that businesses have a greater duty to society than just providing jobs and making profits. It asks business leaders to consider their decisions’ environmental and social impacts in order to reduce harm where possible.
A corporation is a legally establish business that can own assets and incur debt. Choosing to incorporate affects your business's operational, accounting, tax and legal requirements.
A cost advantage occurs when a business can offer products or services at a lower cost than its competitors, giving it a competitive edge.
The cost of capital is the combined cost a company has to pay to borrow money or raise funds through selling shares.
The cost of goods sold (COGS) is the sum of all direct costs associated with making a product. It appears on an income statement and typically includes money mainly spent on raw materials and labour. It does not include costs associated with marketing, sales or distribution.
The cost of sales is the amount a retailer or wholesaler pays to purchase products for resale.
A requirement in a financing agreement, such as maintaining certain financial ratios.
A covenant is a promise that a borrower makes to a lender as part of a business loan agreement.
A cover letter, in a financial context, is a document accompanying a company's financial statements to provide additional context or explanations regarding their preparation and accuracy.
Credit card debt is the money owed for purchases made by credit card.
Credit insurance gurantees a lender gets repaid in the event of a borrower not being able to pay.
The maximum amount a borrower is approved to borrow on a facility or account.
The rules a lender uses to decide what deals are acceptable and on what terms.
A summary of credit history and obligations used to help assess risk.
A numeric indicator of credit risk based on credit history and other factors.
Crowdfunding is a form of fundraising where a business asks the public for a contribution, usually in exchange for equity in the company.
Currency hedging occurs when businesses agree to buy or sell a specific amount of foreign currency at a predetermined exchange rate on a future date to protect themselves from potential losses due to fluctuating exchange rates.
Assets expected to be converted to cash within one year, such as cash and receivables.
Obligations due within one year, such as accounts payable and short-term debt.
Current liabilities are debts a business must pay within a year.
The current portion of long-term debt (CPLTD) is the portion of a company's long-term debt that must be repaid within the next year.
A liquidity measure calculated as current assets divided by current liabilities.
Customer acquisition cost is a metric for calculating how much a business spends to acquire a customer.
Steps taken to verify a customer’s identity and understand transaction risk.
Customer lifetime value is the amount, after expenses, that a business can expect from a specific customer over the course of their relationship.
Customer retention rate measures a company’s existing customers to find the percentage that appear to be more engaged and loyal.
Customer segmentation is a process where your business’s overall customer base is divided into groups that share traits. It helps focus your company’s selling strategy on those customers most likely to buy your product or service.
Customs refers to the government agency or process that regulates and collects duties on goods being imported or exported across a country's borders.
A customs union is an agreement between countries to trade goods freely with each other and charge the same tariffs on imports from outside countries.
A debenture is a marketable security that businesses can issue to obtain long-term financing without needing to put up collateral or dilute their equity.
Money owed that must be repaid, usually with interest and on a schedule.
The required payments to cover principal and interest on outstanding debt.
A measure of cash flow available to cover debt payments, typically cash flow divided by debt service.
The debt-to-equity ratio establishes the relationship between a company’s total debts (liabilities) and the amounts invested and its earnings (shareholders’ equity).
The debt-to-total assets ratio is calculated by dividing a company's total debt by its total assets. It helps assess a company's debt capacity.
Failure to meet the terms of a contract, such as missing payments or breaking covenants.
A payment that is past due according to the agreement.
A demand loan is a type of financing that the lender can call for repayment at any time, even if the borrower is meeting all terms and conditions under the loan agreement.
An accounting method that spreads an asset’s cost over its useful life.
A developed country is one with a strong economy, high average income, advanced technology and widespread access to healthcare and education.
A developing country is generally defined as a nation with a lower level of industrialization, lower standards of living and lower GDP, compared to more economically advanced countries.
Differentiation occurs when a company, product or service is positioned to be distinct from competitors in terms of quality, features, or customer experience.
In receivables finance, reductions to invoice value due to credits, returns, disputes, chargebacks, or short-payments. High dilution reduces borrowing availability.
Direct costs are the expenses a business incurs that can be directly tied to the production of a good or the provision of a service.
An authorized automatic withdrawal from a bank account to make payments.
Direct marketing is a practice that uses personalized messages sent straight to potential customers through channels like email, mail, phone or text.
The act of releasing approved funds to a borrower or vendor.
A rate used to convert future cash flows into today’s value for comparison.
Distributed to paid-in capital (DPI) is the ratio of money distributed to limited partners relative to contributions in a venture capital fund.
Diversification is a strategy that spreads investments or business activities across different products, markets or income sources in order to reduce risk.
Diversity, equity and inclusion are three linked principles that aim to ensure all people—including those from historically under-represented groups such as but not limited to different races, religions, ethnicities, abilities, genders and sexual orientations—are welcomed, included and treated fairly in an organization.
The dividend payout ratio is calculated by dividing dividends paid by earnings after tax and multiplying the result by 100%. It represents how much of a company’s earnings after tax are paid to shareholders.
A dividend is a portion of business earnings distributed by a company to its shareholders, often in the form of cash.
Upfront cash paid by the customer that reduces the amount financed.
A withdrawal of funds from an approved facility, such as a line of credit.
In venture capital, dry powder refers to the capital that venture capital firms have raised but not yet deployed into investments. It represents the amount of money that is available for future investment opportunities, often held in reserve to ensure that the firm can capitalize on promising prospects as they arise. Although the term is used in venture capital, it is also used in the world of private equity investment.
A duty, often called a tariff, is a fee charged by a country on imported goods.
Dynamic pricing is a strategy where a company changes its prices based on demand, supply, competition or other factors.
Paying off a loan or lease before the scheduled end date.
The early stage is the development stage of a company after the seed stage. Companies in this stage are usually focused on product development and early commercialization.
Earnings after tax (EAT) is the amount of profit remaining after all expenses, including interest and taxes, have been subtracted from total revenue. It represents the net income available to shareholders.
Earnings before interest and taxes (EBIT) is the amount of profit remaining from total revenue after deducting all expenses except interest and income taxes. It represents the company's ability to generate profit from operations.
Earnings before tax (EBT) is the amount of profit remaining from total revenue after interest expenses have been deducted but before income taxes are deducted.
Earnings per common share (EPS) is a measure of profitability that shows how much of a company’s profit is assigned to each of its common shares.
EBITDA, which stands for earnings before interest, taxes, depreciation and amortization, helps evaluate a business’s core profitability.
E-commerce is the buying and selling of products or services over the Internet.
The economic environment refers to external factors like income levels, inflation, and market demand, and their effect on consumer and businesses spending, and company performance.
An economic union is an agreement between countries that allows the free movement of goods, services, money and workers.
An economy of scale refers to a decrease in the unit cost of production as production increases.
The true annual cost of borrowing after considering compounding and certain fees.
Efficiency, effectiveness, and flexibility are key ways to describe how a company operates, with efficiency being about using resources well, effectiveness, achieving strong results, and flexibility, adapting quickly to change.
Emerging markets are fast-growing economies that are becoming more industrialized and starting to show traits of developed countries.
Employee buyout occurs when employees purchase a controlling interest in the company from the owner, allowing them to become partial or full owners.
Employee coaching is a one-on-one or team-wide series of activities to improve workplace performance and provide ongoing help to develop employees.
Employee value proposition represents employees’ perception of the value they get from the work experience, workplace environment and benefits their employer provides.
The energy transition is the shift from sources of energy (notably fossil fuels, like oil, gas and coal) that emit greenhouse gases (GHGs) to more sustainable, non-emitting sources, like hydro, wind, nuclear and solar power. The transition involves adopting clean energy technologies, improving energy efficiency and modernizing our energy infrastructure. The goal is to combat climate change by reducing GHG emissions.
An enterprise resource planning (ERP) system is a type of software that allows companies to manage all their different business functions—such as finance and accounting, sales, production and warehousing, among others—on a single platform.
Enterprise value is a theoretical valuation metric that represents a firm's total value, including both its interest-bearing debt and equity components.
Equipment refers to tangible long-term assets used by a business in its operations to produce goods or services.
A contract to use equipment for a set time in exchange for scheduled payments.
A loan used to purchase equipment where the asset often serves as collateral.
Replacing an existing equipment loan or lease with a new financing structure to reduce payments, extend term, or release equity (cash-out) from owned equipment.
The owner’s value in a business, calculated as assets minus liabilities.
Equity dilution occurs when a company issues new shares, lowering the ownership percentage, voting power, and per-share value of existing shareholders.
Equity financing is a type of financing in which companies raise capital by selling to investors, giving them an ownership stake.
The exchange rate is the value at which one currency can be exchanged with another, indicating how much of one currency is needed to purchase a unit of another currency.
An exit refers to the process by which investors liquidate their investment or dispose of their assets in a financial venture. This is a crucial aspect of venture capital investments, as it allows investors to realize returns on their investments.
Exit value refers to the amount received by investors when they sell their stake. This typically occurs through a liquidity event such as an initial public offering (IPO), a merger, an acquisition or a buy-out.
An export plan is a detailed strategy that outlines how a company will enter or expand in international markets.
Exporting is the act of selling goods or services to buyers in another country.
A form of financing where a business sells receivables to access cash sooner.
The price an asset would sell for in an open market between willing parties.
The total cost of borrowing beyond the amount financed, such as interest and certain fees.
A lease that, for accounting purposes, transfers most risks and rewards of ownership to the customer.
Financial statements are formal records that summarize a company’s financial performance for a specific period.
The highest-priority security interest on an asset. A first-position lender gets paid first from the sale of the collateral if there is a default.
Fiscal year-end is the date on which a company finishes a 12-month accounting period. The fiscal year may differ from the calendar year depending on the needs of the company.
A fixed cost is an expense that does not change when sales or production volumes increase or decrease.
An interest rate that stays the same for the entire term or a defined period.
A fixed-rate loan is a type of loan in which the interest rate remains constant throughout the term of the loan, resulting in predictable, stable payment amounts for the borrower.
An interest rate that can change over time based on a benchmark rate.
A floating-rate loan is a business loan where the interest rate changes over time based on market conditions. This means your monthly payments will vary up or down throughout the loan term.
A foreign market is any market outside a company’s home country where it may sell goods or services.
A foreign sales agent is a local representative hired by a company to help sell and promote its products in a market outside the company’s home country.
A franchise is a business model in which an individual or group (the franchisee) is granted the right to operate using the branding, products, and operational methods of an established company (the franchisor) in exchange for initial fees and ongoing royalties.
Free cash flow is the amount of money a company has left over after it has covered its operating expenses and paid for capital expenditures. It is generally used to pay dividends to shareholders and repay loans.
Free on board (FOB) is a shipping term that indicates whether the seller or buyer will be responsible for ensuring that goods are safely loaded onto a vessel at the port of shipment.
A free trade agreement is a deal between countries to remove trade barriers, making it easier and cheaper to buy and sell goods across borders.
A free trade zone is a special area where goods can be moved, processed or stored without customs rules or duties until they leave the zone.
A freight bill is an invoice from a logistics company that details the various costs charged for moving freight.
The date funds are released and the agreement becomes active.
General expenses are overhead costs, such as rent, utilities and office supplies, that help your business function.
A general partnership is a business established by two or more owners. It is the default business structure for multiple owners the same way that a sole proprietorship is the default for solo entrepreneurs.
A security agreement that gives a lender a security interest in a borrower’s present and future personal property assets, often paired with a PPSR registration.
A global business is a company that has operations in multiple countries, unlike an international business that sells globally but operates only in its home country.
Globalization is the international connection and cooperation that makes it easier for countries, businesses and people to trade and work across borders.
A global strategy is a company’s plan to become a global business and operate facilities worldwide.
A global supply chain is the worldwide network of suppliers, manufacturers, warehouses and distributors involved in producing and delivering a product to customers across multiple countries.
A global value chain is a series of connected activities—like sourcing, production, distribution, marketing and service—carried out in multiple countries to add value and gain a competitive advantage.
The GST/HST is a sales tax on supplies of most goods and services in Canada, as well as many supplies of real property and intangible personal property. Businesses are responsible for collecting and remitting the GST/HST they charge to clients and can generally claim input tax credits (ITCs) on GST/HST paid on purchases used in commercial activities.
Canadian sales taxes that may apply to financed purchases or lease payments.
Goodwill is an intangible asset that occurs when a company buys another business for more than the value of its identifiable assets, reflecting the extra value from things like reputation and customer relationships.
A short window after a due date when payment can be made without certain penalties.
The gross domestic product is the standard measure of economic output. It represents the monetary value of all final goods and services made within a region or country in a given period.
The portion of a company’s revenue left over after direct costs are subtracted.
Gross profit margin is a measure of a company’s financial health and efficiency in producing goods. It is calculated by dividing gross profit (net sales minus cost of goods sold) by net sales then multiplying by 100%.
A person or business that promises to repay if the borrower does not.
HACCP is an international food safety certification that guarantees that critical points in product preparation are controlled. It is required by several major labels.
A credit check that can impact an individual’s credit score. Usually happens when a borrower submits a full credit application.
Hedging is a risk management strategy businesses use to protect themselves from potential financial losses.
A portion of proceeds held back to cover potential chargebacks, disputes, or other risks.
An HS code (Harmonized System code) is an internationally standardized numerical method of classifying traded products, used by customs authorities worldwide to assess duties and gather trade statistics.
An import is a product or service brought into a country from abroad.
A report showing revenue, expenses, and profit over a period of time.
Income taxes are mandatory payments individuals or businesses make to the government based on their earnings, profits, or taxable income.
Indirect costs are the expenses a business incurs that are not directly related to making a product or service.
Industrial designs refer to a legal protection that covers the visual appearance of new or original products.
Inflation is a quantitative measure of the overall rise in prices of goods and services over a given period of time.
Information technology (IT) refers to a company’s networks, hardware, software and data storage and the management systems that apply to them.
An initial public offering (IPO) refers to the first time a company sells shares publicly. It is a form of equity financing.
A financial state where a person or business cannot meet obligations as they come due or liabilities exceed assets.
Insolvent means a business is unable to pay its debts when they are due or its liabilities are greater than its assets.
A scheduled payment made at regular intervals under a contract.
Intellectual property is an intangible and created asset that has legal protection from unauthorized use, distribution or sale.
A contract between two or more lenders that sets rules on lien priority, payment waterfalls, enforcement actions, and how collateral proceeds are shared in a default.
The cost paid for borrowing money, usually expressed as a percentage rate.
An interest-only loan is a type of loan in which the borrower is only required to pay the interest on the principal amount for a certain period.
A period when payments cover interest but do not reduce principal.
The percentage used to calculate interest charged on a balance over time.
The internal rate of return (IRR) is a financial metric used in the context of venture capital to estimate the profitability of a fund. It represents the annualized rate of return at which the net present value (NPV) of all future cash flows (both inflows and outflows) from a venture capital fund equals zero.
An international business is a company that sells products or services in other countries but operates its facilities only in its home country.
International certification standards are globally recognized benchmarks that ensure products, services, or processes meet consistent quality, quality, safety, and performance criteria, regardless of their country of origin.
International commercial terms are standardized rules that define the responsibilities of buyers and sellers in global trade.
International Financial Reporting Standards, also referred to as IFRS or IFRS Accounting Standards, are a set of international rules, standards and procedures accountants use to prepare financial statements.
An international market is any market outside a company’s home country where it sells or plans to sell its products or services.
International trade is the buying and selling of goods or services between countries, often made easier by free trade agreements and global trade rules.
An international trade show is an event where businesses from various countries display and promote their products in the media.
Inventory includes finished units of a product being held for sale, as well as unfinished works in process, and any raw materials used to manufacture goods. It is recorded as a current asset on the company’s balance sheet.
Inventory management is how companies balance having enough products to meet customer demand while avoiding excess stock that wastes money.
Inventory turnover is how often a company sells and replaces its inventory within a specific period.
Investments refer to money or resources put into a business, asset, or project with the goal of generating a return or making a profit.
A document requesting payment for goods or services delivered.
Financing where a business borrows against receivables while continuing to manage collections.
ISO 9001 is an international standard that sets out the requirements for a quality management system.
A joint venture is a business entity created by two or more firms through an arrangement that typically includes shared governance, resources, profits, losses and expenses for a particular project.
Kaizen is a Japanese concept meaning “continuous improvement,” where everyone in a company works together to make small, ongoing changes that improve products, services and processes.
Kanban is a scheduling tool that helps manage and track production and improve workflow.
Key success factors are the actions a company needs to focus on in order to compete effectively and achieve its strategic goals.
A set of checks to confirm identity and reduce fraud and financial crime risk.
Labour expenses refer specifically to the human costs directly associated with manufacturing a product, including wages and benefits paid to workers involved in the production process.
Labour productivity is the value a business adds in goods, services or both and is calculated by the hours or employees required to produce that value. It’s key to determining a company's competitiveness and financial success.
A fee charged when a payment is not made by the due date.
Late-stage companies have moved beyond the early phase of development and have rapidly growing sales—or have fast growth potential. For investors, late-stage investment is less risky because the companies are more established in the marketplace and their investments can be converted more quickly into cash.
Leadership is the ability to clearly define a vision for your business and to motivate people to achieve that vision. Successful leaders are knowledgeable about themselves, passionate about their work, open-minded and able to adapt their management style to their audience.
Lean manufacturing is a production methodology focused on maximizing productivity and minimizing waste.
The length of time a lease agreement runs.
A lender is an individual or institution that gives money to a borrower with the expectation of repayment, usually with interest, under agreed-upon terms.
A lending agreement is a formal contract between a lender and borrower that specifies the terms, conditions, and obligations related to the loan.
The customer who uses the asset and makes lease payments.
The party that owns the asset and receives lease payments.
A letter of guarantee is a document from a bank that guarantees a supplier that if a client fails to pay for goods and services provided, the bank will cover the cost.
The use of borrowed money to finance assets or operations.
A leveraged buyout (LBO) is a financial transaction in which a company is acquired primarily using borrowed funds, with the acquired company’s assets often serving as collateral for the loans.
Liabilities are financial obligations or debts a company owes to another party, typically due within a certain timeframe.
A legal claim or security interest on an asset to secure repayment of a debt.
A life-cycle assessment (LCA), also called a life-cycle analysis, is a powerful tool that allows businesses to understand the environmental impact of a product, service or process—from cradle to grave. In other words, It evaluates key environmental aspects, such as energy consumption, resource depletion, and greenhouse gas (GHG) emissions across stages of your operations. Notably, from raw material extraction to transformation, distribution, usage and disposal.
A limited partnership is a business structure involving at least one general partner with management responsibility and unlimited liability, and one or more limited partners who provide capital and have limited liability, without involvement in daily operations.
A revolving facility that allows a borrower to draw, repay, and draw again up to a limit.
How easily assets can be converted to cash to meet short-term obligations.
A loan is money a company borrows with a promise to repay it over time, usually with interest and under agreed terms.
Loan acceptance occurs when a borrower accepts the terms and conditions of a loan in writing.
The contract that sets out the loan amount, rate, term, and borrower obligations.
Loan authorization is the approval process in which a lender assesses a borrower’s application and creditworthiness and formally agrees to provide the loan.
Loan maturity date is when the final payment on a loan is due, marking the end of the repayment period and the borrower’s obligations.
The amount borrowed compared to the value of the collateral, expressed as a percentage.
Local culture refers to the unique behaviours, beliefs and customs of a specific country or region, which businesses must understand and respect when operating internationally.
As one component of supply chain management, logistics is the process of coordinating and managing the flow of material goods as they make their way from production to the point of consumption and, in some cases, back again.
Long-term assets are resources or property a company expects to provide economic value for more than one year, such as equipment, real estate, or investments.
Long-term liabilities are debts or financial obligations a company must pay over a period longer than one year, such as bonds or long-term loans.
A low-carbon economy is designed to minimize the production of greenhouse gas (GHG) emissions while still supporting economic growth and social progress.
Managerial preferences are the personal beliefs, values, and biases of managers that shape a company’s strategy and decision-making, for better or worse.
Market capitalization is the total market value of a public company’s outstanding shares, calculated by multiplying the number of shares by their current market price.
Market entry is the process of introducing a product or service into a new market, supported by a strategy to guide the expansion steps and goals.
A market entry strategy is a company’s plan for successfully introducing its products or services into a new market, considering factors like local culture, competition, costs, and barriers to entry.
A marketing mix is the combination of product, pricing, place and promotion strategies a company uses to attract customers and stand out from competitors.
A marketing plan is a document outlining a company's marketing and advertising strategies, goals, and activities for a specific period.
Market research involves the systematic collection and analysis of information about customers, competitors, and the overall market to gain insights into consumer needs, preferences, and emerging trends.
A materiality assessment is a tool that helps businesses identify and prioritize the most significant environmental, social and governance (ESG) issues relevant to their operations and stakeholders.
The date when the full remaining balance becomes due under the agreement.
An advance based on future sales where repayment is typically taken as a percentage of daily card sales or daily/weekly withdrawals. Cost is often quoted as a factor rate instead of an interest rate.
Mergers and acquisitions (M&A) combine two business entities into one. A merger occurs when the two businesses form a new, third entity. In an acquisition, one company purchases and absorbs the other into its operations.
Mezzanine financing is a type of financing that combines debt and equity.
The amount due each month under a loan or lease schedule.
Most favoured nation is a principle defined by countries treating all trading partners equally and applying the same trade terms.
A multinational corporation is a company that operates in foreign countries and has facilities abroad, but still focuses mainly on its home market.
National treatment is a trade principle requiring countries to treat imported goods, services, and intellectual property the same as domestic equivalents.
Profit after all expenses, interest, and taxes are deducted from revenue.
A calculation that compares today’s value of future cash flows to the upfront cost.
Net present value (NPV) is an indicator you can use to assess the profitability of an investment project.
The net profit margin ratio is the percentage of revenue remaining as profit after all expenses, including interest and taxes, are paid. It is calculated by calculated by dividing a company’s net income (earnings after taxes) by its net revenue and multiplying by 100%.
A net promoter score is a measurement of customer satisfaction. It’s calculated by subtracting the percentage of detractors from the percentage of promoters.
Net revenue is the total income a business earns from sales after subtracting returns, allowances, and discounts.
A business reaches net-zero emissions when its greenhouse gas (GHG) emissions are reduced to a minimum and offset with carbon credits. As a result, the total amount of GHG produced equals the amount of offset GHG emissions.
A non-blended loan is a type of loan that has a fixed monthly principal payment plus interest on the declining balance. The total payment of principal and interest is not blended into single unchanging amount. It sees declining monthly payments over the life of a loan.
Non-blended payments are loan payments where the principal is paid in equal amounts monthly, reducing overall interest costs.
Factoring where the factor assumes certain credit risk of customer non-payment, typically limited to specific insolvency-related scenarios defined in the contract.
A bank term meaning there was not enough money in an account to cover a payment or cheque, causing it to bounce. NSF events can trigger fees and raise lender concern about cash flow control.
Notes payable are the long-term liabilities a company owes to lenders.
Notes to the financial statements are additional disclosures that provide detailed explanations, assumptions, and context for the figures presented in the financial statements.
A notification that receivables or payment rights have been assigned to another party.
An offer advantage occurs when a business can offer products or services that meet a unique customer need, differentiating it from competitors.
One-time expenses or revenues are non-recurring financial transactions that are not part of a company's regular activities, such as relocating the business or selling a building.
Operating activities are the day-to-day activities related to running a business. Non-operating activities are one-time transaction unrelated to core operations.
Operating expenses, also known as selling, general and administrative expenses (SG&A), are the fixed costs your business incurs that are not directly related to production.
A lease structured more like a rental: the lessee uses the asset for a period and may return it at the end. Accounting and tax treatment can differ from a finance lease depending on facts and structure.
The operating profit margin measures a company's operational efficiency, expressed as a percentage. It is calculated by subtracting operating expenses from net sales, dividing this number by net sales and then multiplying by 100%.
Operations refer to the day-to-day activities and processes involved in running a business.
Opportunity cost (also known as “alternative cost,”) is the difference between a project’s cost estimate and another option that must be foregone in order to implement the project.
Refers to the study and understanding of how people’s interactions within a company affect its performance.
Organizational culture is the shared beliefs, values and behaviours within a company that shape how employees work and interact with each other.
A fee charged for setting up or underwriting a new loan or lease.
Overhead refers to the ongoing costs of running a business that are not directly tied to producing goods or services.
Pari-passu is a co-lending agreement where all lenders share repayment equally and proportionally, based on how much each is owed.
Par value is the nominal value assigned to a share, usually unrelated to its market value and mainly used for accounting purposes.
A patent is a legal document that gives the holder exclusive rights to an invention, product, or process for a specific period.
Patient capital refers to long-term investments in early-stage or growth businesses, where investors are willing to offer flexible terms and wait several years for potential returns.
Payables turnover is a measure of short-term liquidity. It shows how quickly a company pays off its accounts payable.
A payment structure where each payment is made at the start of the period.
A payment structure where each payment is made at the end of the period.
A four-stage approach for making incremental changes and improvements in processes and products.
Performance appraisal is a process for evaluating and documenting how well an employee is carrying out their job.
Performance management is a structured process for guiding employees to act in a way that your business needs to achieve its goals.
A promise by an individual to repay a business debt if the business cannot.
A personal loan is a type of loan given to individuals for a personal need, such as consolidating debt or paying for home renovations.
A public registry filing in Canada that records a lender’s security interest (lien) in a borrower’s personal property. It establishes priority and gives notice to other creditors.
Point of sale systems help businesses conduct transactions with their customers, primarily for purchases and payments. More sophisticated POS systems can also manage inventory, staff, marketing, loyalty programs, e-commerce, analytic insights and more.
Porter’s five forces model allows you to assess a company’s ability to generate a profit in its business environment.
An initial credit decision based on limited information, subject to final verification.
Preferred shares are a type of share that gives shareholders partial ownership of a company and priority claim to dividends, but generally no voting rights.
Pre-paid expenses are payments made in advance for goods or services that will be received in the future.
Paying down principal before it is due, which can reduce future interest.
A fee charged for paying off a loan or lease early, if the contract allows.
The price elasticity of demand is a calculation that measures how demand for a product or service varies after a change in price.
Price segmentation involves charging different types of customers different prices for the same product or use of a service.
The P/E ratio is determined by dividing the current price of a common share by the earnings per common share (EPS) for the latest reporting period in order to determine a company’s value in the marketplace.
Pricing decisions are the choices a business makes when setting prices to attract customers, stay competitive and remain profitable.
The prime interest rate is the reference rate used by financial institutions to determine the variable interest rate they will offer for loans to businesses and individuals.
A benchmark rate used by many financial institutions to price variable-rate lending.
The original amount borrowed or the remaining loan balance before interest.
A private company is a business owned by individuals or a small group of investors, and its shares are not traded on public stock exchanges.
Private equity is a form of investment where funds are directly invested into private companies, or where private equity firms acquire public companies to take them private.
Procurement is the process of finding, acquiring and managing goods or services a business needs for its operations.
Product adaptation is the process of modifying a product to meet the needs, preferences or legal requirements of customers in a different market.
A written promise to pay a sum of money, to a specified individual or organization, at a specified time in the future, and that is not always supported by a guarantee.
A formal offer made under insolvency rules to repay creditors a portion of what is owed over time as an alternative to bankruptcy.
A public company is one that sells its shares on a stock exchange, allowing the public to invest, and must follow strict financial reporting and governance rules.
Purchase discounts are price reductions given to encourage customers to buy, while allowances are incentives to encourage early payment on credit purchases.
An end-of-term right to buy a leased asset for a set price or fair market value.
Funding that helps pay suppliers to fulfill a confirmed customer order.
Quick assets are assets that can be quickly converted into cash.
A pricing factor used to calculate a lease payment from the equipment cost.
Ratio analysis is a method of evaluating a company's financial performance and health by examining various financial metrics expressed as ratios.
Raw material expenses are the costs of the basic materials used in manufacturing a product.
A process where a receiver is appointed to take control of a company’s assets to repay creditors, often during enforcement of secured debt.
Factoring where the business ultimately remains responsible if the customer does not pay (subject to the agreement’s rules).
Replacing an existing loan or lease with a new one, often to change rate, term, or cash out equity.
A niche form of factoring where a business advances cash against invoices for repairs (for example, truck repairs billed to fleets or insurers), helping cover parts and labour costs before payment arrives.
In factoring, the portion of invoice value held back by the factor to cover disputes, credits, or dilution. Released after the invoice is paid, minus fees.
The expected value of an asset at the end of a lease term.
A retailer is a business that sells goods or services directly to consumers.
Retained earnings are the amount of profit remaining after a company has paid all costs, income taxes, and dividends.
he return on common equity ratio measures how much profit is generated for each dollar invested by shareholders in common shares, expressed as a percentage.
Return on Investment (ROI) measures how much profit is made from an investment relative to its cost, expressed as a percentage.
The return on shareholders' equity ratio measures how much profit is generated for each dollar of equity invested by shareholders, expressed as a percentage.
The return on total assets ratio is obtained by dividing a company’s earnings after tax by its total assets. This profitability indicator helps you determine how your company generates its earnings and how you compare to your competitors.
Revenue is the total amount of money a company earns from selling its products and services before any expenses are deducted.
Rewards and recognition refer to a practice used by organizations to acknowledge and appreciate the contributions of employees.
A lender’s internal score or category that summarizes credit risk.
Rules of origin are laws and procedures that determine a product’s country of origin for applying proper tariffs and regulations.
A transaction where a business sells an owned asset to a finance company and leases it back, releasing cash while keeping use of the asset.
Scope 1, 2 and 3 carbon emissions are categories used to classify different sources of greenhouse gas emissions associated with a company’s operations. Scope 1 represents what the company produces itself; Scope 2, what it draws from the energy grid; and Scope 3, the supply-chain and marketing resources required for its operations.
A seasonal payment is a loan repayment structure that aligns with a business’s seasonal cash flow.
Secondaries refer to the market for buying and selling existing interests or stakes in venture capital funds or portfolios of private equity investments.
A security interest that ranks behind the first-position lien. The second-position lender is paid only after the first-position lender is paid in full from collateral proceeds.
A loan backed by collateral. If the borrower defaults, the lender can enforce its security and recover funds from the collateral.
Securitization is the process of converting assets like loans or receivables into securities that can be sold to investors.
The priority ranking of a lender’s claim on collateral compared with other lenders (first position, second position, and so on). Position impacts risk, rate, and advance amount.
Seed capital is the initial amount of money an entrepreneur uses to start a business. Often, this money comes from family, friends, early shareholders or angel investors.
A self-employed worker is someone who runs their own business or works independently without being employed by an employer.
Selling expenses are the costs of promoting, selling, and distributing a product or service.
Semi-variable costs are expenses that include both fixed-cost and variable-cost components.
Senior debt is a type of loan secured by collateral that must be repaid first in the event of a company default.
Setting objectives consists of establishing specific, measurable goals for staff members to achieve.
Share capital is the money a company raises from selling shares.
A shareholder is a person or entity that owns shares in a company.
Shareholder injections refer to additional capital provided by shareholders into a company, while redemptions occur when a company buys back shares from its shareholders.
A shareholders’ agreement is a legally binding document that outlines the rights, responsibilities and obligations of a corporation’s shareholders.
This often-misunderstood measure is crucial for understanding your company’s financial health and stability.
Shares authorized, issued and outstanding refer to the total number of shares a company is legally allowed to sell (authorized), has actually sold (issued), and are currently held by outside investors (outstanding).
Short selling occurs when an investor borrows shares, sells them, and hopes to buy them back later at a lower price to make a profit.
Six Sigma is a data-driven quality improvement methodology that businesses use to enhance processes, reduce defects, and eliminate waste.
A stock keeping unit, also known as a SKU (pronounced "skew"), is an internal identification code for a product. Unique SKUs allow a seller to know what's in and what's not in stock—but, most importantly, what sells.
SMART is an acronym that defines important criteria for setting ideal goals and objectives to manage your staff or a company. SMART objectives must be specific, measurable, achievable, relevant and time-bound.
A social entrepreneur is someone whose goal in business is not only to make a profit, but also to address social and environmental challenges.
A credit check that does not impact an individual’s credit score. Often used for pre-qualification or initial screening.
A sole proprietorship is a business with a single owner who is solely responsible for all liabilities. In the eyes of legal and tax authorities, the business and the operator are one and the same.
A special purpose acquisition company (SPAC) is a type of investment vehicle that aims to raise capital through an initial public offering (IPO) with the sole purpose of acquiring or merging with an existing private company. SPACs offer an alternative route for private companies to go public, bypassing the traditional IPO process and often providing a quicker and more flexible path to public markets.
A standard operating procedure is a step-by-step set of instructions that communicate to employees the process for completing a key workplace operation.
A start-up is a business in its early development stage, often focused on launching and growing a product or service.
The statement of retained earning shows the accumulated profit of a company after dividend are paid to shareholders.
A statement of work is a document two parties agree to that outlines the scope, deliverables, timeline and quality expectations for a project or service.
A stepped payment is a loan arrangement that allows for monthly repayments to start low and increase gradually over time.
Strategic goals are specific, measurable objectives a company wants to achieve within a certain time period.
A strategic plan is a document that details a company's goals for a specified period and the actions needed to achieve them.
Strategic planning is a multi-year process that helps a company determine which market opportunities it will pursue.
Strategic scope defines the products, services, markets and customers a company will focus on over a set time.
Subordinate financing is a type of debt where the lender ranks below senior lenders in their claim on collateral.
A legal agreement where one lender agrees that its lien will rank behind another lender’s lien (changing lien priority). Common in multi-lender deals.
A subsidiary is a legal entity controlled by another legal entity. Subsidiaries are often used to facilitate international trade, but also to obtain legal protection and to better control the profitability of a business.
Succession planning is the process of preparing successors for key roles so disruption is minimized during leadership changes.
Supply chain management is the coordination of all activities involved in producing and delivering a product to customers across multiple countries.
Sustainability is an approach to planning and development that attempts to balance environmental, social and economic needs and impacts.
SWOT analysis is the process of assessing a company's strengths, weaknesses, opportunities and threats.
A syndicated loan is a large loan provided by a group of lenders who each contribute a portion of the funds and share the lending risk.
System and Organization Controls 2 (SOC 2) is a cybersecurity compliance standard specifying ways for organizations to ensure their client data is stored and processed in a secure manner.
Assets can be tangible or intangible. An intangible asset is a non-monetary asset that cannot be seen or touched. Tangible assets are physical assets that can be seen, touched and felt.
Target market refers to the specific group of customers a company aims to serve, based on factors like needs, habits and potential profitability.
A tariff is a tax imposed by a country on imported.
Taxes payable is the amount of taxes a business currently owes to the government.
Technical barriers to trade are regulations, standards or procedures that complicate or restrict the export of goods to foreign markets.
A loan with a fixed repayment schedule and a set end date.
A summary of key deal terms used to align expectations before final documents.
A security interest that ranks behind both first and second liens. This is higher risk for the lender and usually comes with tighter terms or higher pricing.
A disclosure showing the amount paid for credit, including interest and certain fees.
The total cost of ownership (TCO) is the total cost of buying and using an asset over its useful life.
Total quality management is an approach focused on continuously improving product quality and customer satisfaction through collaboration, data-driven processes and proactive problem-solving.
Total value to paid-in capital is a ratio used to measure the performance of a venture capital fund. It divides total value of a fund by the initial capital investment made by limited partners.
Trade credit insurance is a type of insurance that protects businesses against the risk of non-payment by customers.
A trademark is a recognizable word, phrase or design that legally differentiates a specific product or service from all others.
A trade mission is a government-led trip where officials and businesspeople visit another country to promote trade and build international business relationships.
A supplier or partner that can confirm a business’s payment habits and history.
A trade secret is confidential business information that gains its value from not being publicly known and is protected by keeping it secret.
Trend analysis is the process of collecting and analyzing historical data to identify patterns or trends over time.
Reviewing financial, operational, and asset details to decide approval and pricing.
Unicorns are privately held start-up companies that have achieved a valuation of $1 billion or more. Used in the venture capital industry, and first coined by venture capitalist Aileen Lee in 2013, the term is meant to highlight the rarity of such high valuations.
The unit selling price is the amount a company charges for a single item of a product or use of a service.
A loan that is not backed by specific collateral. Approval depends mainly on credit, cash flow, and financial strength, so pricing is usually higher than secured borrowing.
Valuation is the process of determining the economic value of a business, asset or investment.
Values are the core beliefs and principles that guide an organization's behavior, decision-making, and culture.
A variable cost is an expense that changes with the amount of goods produced or services provided.
A financing arrangement offered through a seller to help customers buy the seller’s products.
Venture capital is money invested in early-stage, high-potential startups in exchange for equity ownership.
The Venture Capital Action Plan is a Canadian government initiative that encourages private investment in early-stage companies by matching private capital with public funding.
A venture capital fund is a type of investment fund that pools capital from multiple investors to invest in early-stage high-potential startups in exchange for ownership shares in these companies.
Venture debt is a form of bridge financing specifically tailored for early-stage companies and start-ups. It is designed to help them extend their runway, fund growth initiatives, and bridge the gap between equity rounds.
Mission and vision statements are documents that put into words a company’s identity. The mission statement explains why the company exists, while the vision statement makes it clear what it aspires to become.
A cancelled cheque used to verify banking details for automatic payments.
The weighted average cost of capital (WACC) is the average rate that a business pays to finance its assets.
A wholesaler is a person or company that acts as an intermediary in the supply chain and helps distribute commodities from source to end user.
Working capital is the amount of cash and other current assets a business has available after all its current liabilities are accounted for.
Financing used to cover day-to-day operating expenses, payroll, supplier payments, and short-term cash flow gaps.
Removing an uncollectible amount from accounts for accounting purposes.
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