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Financial Terms | |
Credit period |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
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Definition of Credit periodCredit periodThe length of time for which the customer is granted credit.
Related Terms:Full Credit PeriodThe period of trade credit given by a supplier to its customer. Waiting Period (Credit Insurance)A specific time that must pass following the onset of a covered disability before any benefits will be paid under a creditor disability policy. (Also known as an elimination period). Accidental Dismemberment: (Credit Insurance)Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident. Accounting periodThe period of time for which financial statements are produced – see also financial year. Amortization (Credit Insurance)Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity. Annualized holding period returnThe annual rate of return that when compounded t times, would have Annuity PeriodThe time between each payment under an annuity. ![]() Average Amortization PeriodThe average useful life of a company's collective amortizable asset base. Average Collection PeriodAverage number of days necessary to receive cash for the sale of Average collection period, or days' receivablesThe ratio of accounts receivables to sales, or the total Beneficiary (Credit Insurance)The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor. Best-interests-of-creditors testThe requirement that a claim holder voting against a plan of reorganization Borrower (Credit Insurance)A consumer who borrows money from a lender. Commercial Business Loan (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes. Comparative credit analysisA method of analysis in which a firm is compared to others that have a desired Compounding periodThe length of the time period (for example, a quarter in the case of quarterly compounding periodthe time between each interest computation Consumer creditcredit granted by a firm to consumers for the purchase of goods or services. Also called Consumer Credit Protection ActA federal Act specifying the proportion of CreditMoney loaned. CreditBuying or selling goods or services now with the intention of payment following at some time in CreditOne side of a journal entry, usually depicted as the right side. CreditA rating of a company's credit (ability to payback debt), usually by a third party credit agency. creditOn your bank statement, 'credit' represents funds that you have deposited into your account. The opposite of a credit is a debit. Credit analysisThe process of analyzing information on companies and bond issues in order to estimate the credit analysisProcedure to determine the likelihood a customer will pay its bills. credit bureauAn organization that provides financial institutions with credit information concerning existing or potential customers who are looking to obtain credit services. credit cardA revolving source of credit with a pre-established limit. You have to pay interest on a credit card if you have an outstanding balance. Credit CrunchA decline in the ability or willingness of banks to lend. Credit enhancementPurchase of the financial guarantee of a large insurance company to raise funds. Credit LossA loan receivable that has proven uncollectible and is written off. credit memoA record of the funds which have been credited to your account. credit policyStandards set to determine the amount and nature of credit to extend to customers. Credit RationingRestriction of loans by lenders so that not all borrowers willing to pay the current interest rate are able to obtain loans. Credit riskThe risk that an issuer of debt securities or a borrower may default on his obligations, or that the Credit RiskFinancial and moral risk that an obligation will not be paid and a loss will result. Credit scoringA statistical technique wherein several financial characteristics are combined to form a single Credit spreadRelated:Quality spread Credit TermsConditions under which credit is extended by a lender to a borrower. Credit Unioncredit unions are community based financial co-operatives and most offer a full range of services. All are owned and controlled by members who are also shareholders. credit unions are regulated provincially and insured by a stabilization fund, deposit insurance or guarantee corporation. Crediting rateThe interest rate offered on an investment type insurance policy. CreditorLender of money. CreditorPerson or business that is owed money. Creditor (Credit Insurance)A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity. Creditor Proof ProtectionThe creditor proof status of such things as life insurance, non-registered life insurance investments, life insurance RRSPs and life insurance RRIFs make these attractive products for high net worth individuals, professionals and business owners who may have creditor concerns. Under most circumstances the creditor proof rules of the different provincial insurance acts take priority over the federal bankruptcy rules. CreditorsPurchases of goods or services from suppliers on credit to whom the debt is not yet paid. Or a Critical Growth PeriodsTimes in a company's history when growth is essential and without which survival of the business might be in jeopardy. Critical Illness Insurance (Credit Insurance)Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing. Debt (Credit Insurance)Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. Debt may or may not be secured. Demand line of creditA bank line of credit that enables a customer to borrow on a daily or on-demand basis. Disability Insurance (Credit Insurance)Group Insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury. Discount periodThe period during which a customer can deduct the discount from the net amount of the bill Discounted payback period ruleAn investment decision rule in which the cash flows are discounted at an EurocreditsIntermediate-term loans of Eurocurrencies made by banking syndicates to corporate and Evaluation periodThe time interval over which a money manager's performance is evaluated. Evergreen creditRevolving credit without maturity. Export Credit InsuranceThe granting of insurance to cover the commercial and political risks of selling in foreign markets. Extended Amortization PeriodAn amortization period that continues beyond a long-lived asset's economic useful life. Extended Amortization PeriodsAmortizing capitalized expenditures over estimated useful lives that are unduly optimistic. Federal credit agenciesAgencies of the federal government set up to supply credit to various classes of Five Cs of creditFive characteristics that are used to form a judgement about a customer's creditworthiness: Foreign tax creditHome country credit against domestic income tax for foreign taxes paid on foreign Formalized Line of CreditA contractual commitment to make loans to a particular borrower up to a specified maximum during a specified period, usually one year. Full faith-and-credit obligationsThe security pledges for larger municipal bond issuers, such as states and Grace PeriodA specific period of time after a premium payment is due during which the policy owner may make a payment, and during which, the protection of the policy continues. The grace period usually ends in 30 days. Grace PeriodLength of time during which repayments of loan principal are excused. Usually occurs at the start of the loan period. Holding periodLength of time that an individual holds a security. Holding period returnThe rate of return over a given period. Insurance Policy (Credit Insurance)A policy under which the insurance company promises to pay a benefit of the person who is insured. Investment tax creditProportion of new capital investment that can be used to reduce a company's tax bill Investment Tax CreditA reduction in taxes offered to firms to induce them to increase investment spending. Job Loss Insurance (Credit Insurance)Coverage that can pay down your debt should you become involuntarily unemployed. The payment is made to your creditors to reduce your debt owing. Lease (Credit Insurance)Contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lessor and the user the lessee. Lender (Credit Insurance)Individual or firm that extends money to a borrower with the expectation of being repaid, usually with interest. Lenders create debt in the form of loans. Lenders include financial institutions, leasing companies government lending agencies and automobile dealers. Letter of credit (L/C)A form of guarantee of payment issued by a bank used to guarantee the payment of Letters of CreditA letter of credit is a guarantee of payment by a bank (issuing institution)to a third party for a specific amount of money, if certain conditions are met. Life Insurance (Credit Insurance)Group Term life insurance that pays or reduces the balance due on a loan if the borrower dies before the loan is repaid. Line of credit An informal arrangement between a bank and a customer establishing a maximum loan Line of creditAn informal arrangement between a bank and a customer establishing a maximum loan line of creditAgreement by a bank that a company may borrow at any time up to an established limit. Line of CreditAn agreement negotiated between a borrower and a lender which establishes the maximum amount against which a borrower may draw. The agreement also sets out other conditions, such as how and when money borrowed against the line of credit is to be repaid. line of creditA revolving source of credit with a pre-established limit. You access the funds only as you need them, and any amount that you pay back becomes accessible to you again. Unlike a personal loan, a line of credit permits you to write cheques and make bank machine withdrawals, and requires you to pay interest only on the funds that you actually use. Mortgage (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for purposes of purchasing a loan secured by a home. Mortgage Life insurance (Credit Insurance)Decreasing term life insurance that provides a death benefit amount corresponding to the decreasing amount owed on a mortgage. Multiperiod immunizationA portfolio strategy in which a portfolio is created that will be capable of Net periodThe period of time between the end of the discount period and the date payment is due. Neutral periodIn the Euromarket, a period over which Eurodollars are sold is said to be neutral if it does not Odd first or last periodFixed-income securities may be purchased on dates Operating Line of CreditA bank's commitment to make loans to a particular borrower up to a specified maximum for a specified period, usually one year. Payback PeriodThe number of years necessary for the net cash flows of an payback periodthe time it takes an investor to recoup an payback periodTime until cash flows recover the initial investment of the project. period costcost other than one associated with making or acquiring inventory Period costsThe costs that relate to a period of time. periodic compensationa pay plan based on the time spent on the task rather than the work accomplished Periodic inventoryA physical inventory count taken on a repetitive basis. Periodic inventory systemAn inventory system in which the balance in the Inventory account is adjusted for the units sold only at the end of the period. Personal Line of credit (Credit Insurance)A bank's commitment to make loans to a borrower up to a specified maximum during a specific period, usually one year. personal line of credit (PLC)A revolving source of credit with a pre-established limit. You access the funds only as you need them, and any amount that you pay back becomes accessible to you again. Unlike a personal loan, a PLC permits you to write cheques and make bank machine withdrawals, and requires you to pay interest only on the funds that you actually use. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |