Credit/Banking Keywords

Term loan

Draw

Facility

Landlord contribution

Soft costs

In lending and construction finance, soft costs are project expenses that are not directly tied to the physical construction of an asset.

Common Soft Costs

• Architectural and engineering fees

• Legal fees

• Permits and licenses

• Environmental reports

• Appraisal fees

• Survey costs

• Insurance

• Interest during construction

• Project management fees

• Consulting fees

• Marketing and leasing expenses

• Developer fees (depending on the deal structure)

Credit Facility

Hard construction costs

Roll-up transaction

Landlord Contribution

Copilot said:

A landlord contribution (also called a tenant improvement allowance (TIA) or landlord allowance) is money that a landlord agrees to provide to a tenant to help pay for the cost of preparing, improving, or customizing leased space.

Founder Equity

Investor Equity

SSBCI Loan

Tenant Improvement Allowance (TIA)

Also called a landlord allowance, a landlord contribution is money that a landlord agrees to provide to a tenant to help pay for the cost of preparing, improving, or customizing leased space.

Debt service

Discretionary Cash Flow

Total Equity

Debt to Equity Ratio

Tangible Net Wort

Debt to Tangible Net Worth Ratio

0.00 0.00 Debt Service

Debt Service

Coverage Ratio

6.62 7.69 Interest Coverage Ratio

14.13 13.41 Senior Debt to Cash Flow 0.00 0.00 0.00 0.00 0.00 0.00 Debt to Cash Flow Debt to Capitalization 0

ERTC

EBITDA

mortization

Global debt service

Income Statement

Balance Sheet

Statement of Equity

Cash Flow Summary

Investment Units

Operational risk

Operational risk refers to the potential for loss resulting from inadequate or failed internal processes, people, systems, or external events. In the banking sector, this type of risk is particularly significant due to the complex nature of financial transactions and the regulatory environment in which banks operate. Operational risk can arise from various sources, including: Human error: Employee mistakes such as data entry or miscommunication System failures: IT outages or technical glitches Fraud: Internal or external misconduct Regulatory noncompliance: Violations leading to fines or disruptions External events: Natural disasters, political/regulatory changes, or economic shocks Understanding operational risk is crucial for banks as it helps them to develop strategies to mitigate potential losses and ensure smooth operations. 🌟 What did you think of this activity

Key Financial Statements

When businesses present their financial condition to external stakeholders, taxing authorities, investors, and the general public, the most common format for this information is one of four key financial statements. These four statements are the Income Statement, Statement of Owners Equity (also called the Statement of Retained Earnings), Balance Sheet, and Statement of Cash Flows. These four statements, although representing different facets of the company’s finances, are all interconnected and create a birds-eye view of the company’s financial position.

Statement of retained earnings

explains the changes in retained earnings (or owner’s equity) between two balance sheet dates

statement of cash flows

a summary of the money flowing into and out of a firm, is the financial statement used to assess the sources and uses of cash during a certain period

revenues

the inflows of cash resulting from the sale of products or the rendering of services to customers

revenues

the inflows of cash resulting from the sale of products or the rendering of services to customers

net loss

when expenses exceed revenues

MLC

Management Loan Committee

stabilization timeframe

1.25x DSCR o

personal guaranty f

RE Schedule

PFS spread

SNDAs

Interest escrow reload

SREQ

Short-Run Equilibrium

bad boy carve-out

Financial statements

Financial statements are reports that summarize and communicate information obtained from day-to-day bookkeeping activities. After all of the income and expenses of the business have been recorded, financial accountants prepare financial statements in the following order:

Income Statement

Statement of Retained Earnings—also called Statement of Owner’s Equity

The Balance Sheet

The Statement of Cash Flows

The accounting equation represents the relationship between assets, liabilities, and the owner’s equity of a business. It can be calculated at any point in time using information from the balance sheet, which we will discuss later. It’s the foundation for the double-entry accounting system, accepted to be the most reliable and accurate method of recording the financial transactions of a business.

Assets may be anything tangible or intangible that can be owned or controlled to produce value. Tangible assets are things like cash, equipment, and buildings. Intangible assets are things like patents and trademarks.

Liabilities are debts, or what the organization owes to its creditors. Liabilities include things like loans and monies owed to suppliers.

Owner’s equity is the difference between the value of the assets and the amount of the liabilities. It is also sometimes called net worth. When the owners are shareholders, the interest can be called shareholders’ equity; the accounting remains the same, and it is ownership equity spread out among shareholders.

The accounting equation represents the relationship between assets, liabilities, and the owner’s equity of a business. It can be calculated at any point in time using information from the balance sheet, which we will discuss later. It’s the foundation for the double-entry accounting system, accepted to be the most reliable and accurate method of recording the financial transactions of a business.

Assets may be anything tangible or intangible that can be owned or controlled to produce value. Tangible assets are things like cash, equipment, and buildings. Intangible assets are things like patents and trademarks.

Liabilities are debts, or what the organization owes to its creditors. Liabilities include things like loans and monies owed to suppliers.

Owner’s equity is the difference between the value of the assets and the amount of the liabilities. It is also sometimes called net worth. When the owners are shareholders, the interest can be called shareholders’ equity; the accounting remains the same, and it is ownership equity spread out among shareholders.

Net profit or loss is one measure of a company’s financial performance. However, creditors and investors are also extremely interested in how much cash a business generates and how it is used. The statement of cash flows is a summary of the money flowing into and out of a firm. It is the financial statement used to assess the sources and uses of cash during a certain period, typically one year. All publicly traded firms must include a statement of cash flows in their financial reports to shareholders. The statement of cash flows tracks the firm’s cash receipts and cash payments. It gives financial managers and analysts a way to identify cash flow problems and assess the firm’s financial viability.

The statement of cash flows classifies cash receipts and disbursements as operating, investing, and financing cash flows. Both inflows and outflows are included within each category.

The accounting equation represents the relationship between assets, liabilities, and the owner’s equity of a business. It can be calculated at any point in time using information from the balance sheet, which we will discuss later. It’s the foundation for the double-entry accounting system, accepted to be the most reliable and accurate method of recording the financial transactions of a business.

Assets may be anything tangible or intangible that can be owned or controlled to produce value. Tangible assets are things like cash, equipment, and buildings. Intangible assets are things like patents and trademarks.

Liabilities are debts, or what the organization owes to its creditors. Liabilities include things like loans and monies owed to suppliers.

Owner’s equity is the difference between the value of the assets and the amount of the liabilities. It is also sometimes called net worth. When the owners are shareholders, the interest can be called shareholders’ equity; the accounting remains the same, and it is ownership equity spread out among shareholders.

The accounting equation represents the relationship between assets, liabilities, and the owner’s equity of a business. It can be calculated at any point in time using information from the balance sheet, which we will discuss later. It’s the foundation for the double-entry accounting system, accepted to be the most reliable and accurate method of recording the financial transactions of a business.

Assets may be anything tangible or intangible that can be owned or controlled to produce value. Tangible assets are things like cash, equipment, and buildings. Intangible assets are things like patents and trademarks.

Liabilities are debts, or what the organization owes to its creditors. Liabilities include things like loans and monies owed to suppliers.

Owner’s equity is the difference between the value of the assets and the amount of the liabilities. It is also sometimes called net worth. When the owners are shareholders, the interest can be called shareholders’ equity; the accounting remains the same, and it is ownership equity spread out among shareholders.

The balance sheet lists the company’s assets, liabilities, and equity (including dollar amounts) for a specific moment in time. That specific moment is the close of business on the date listed at the top of the balance sheet. A balance sheet is like a photograph; it captures the financial position of a company at a particular moment in time.

You can see from the example below that the balance sheet takes the information from the balance of accounts above and groups the items according to whether they are assets, liabilities, or equity.

 

ACP (Alternative Compliance Penalty)

UCA Cash Flow

Puts and takes

Interest Reserve (IR)

386

SREQ

Puts and takes

Hedge Expenses

Payment vs Evergreen reserve (not going away, not being reduced)

T 12

IO

T 12

LTC

Burn

Risk Rating

5 Cs of Credit

TIs

LCs

Pro-formus

 

PPA (Power Purchasing Agreement)