Funding Glossary

A to C

Term	Meaning
ACH	The US electronic system that moves money between bank accounts. Most advance payments are ACH debits.
ACH debit	A pull of money from an account by a company the owner authorised, such as a funder or a lender.
Accounts receivable (AR)	Money customers owe the business for work already done or goods delivered.
AR aging report	A list of unpaid invoices grouped by how long they have been unpaid (for example 0 to 30 days, 31 to 60 days).
Advance	Short for merchant cash advance. Money given now in exchange for a share of future sales.
Advance proceeds	The money a funder deposits into the merchant's account. Never counted as revenue.
Affiliate	Another business owned by the same owners. Some programs need its financials too.
After-repair value (ARV)	What a property should be worth after renovation. Used in Fix and Flip.
APR	Annual percentage rate. A yearly cost measure required in some state disclosures. You never quote it.
Application	The signed form with business and owner details and permission to share the file with funders.
Auto-stop flag	A fact that stops a file until the desk lead reviews it: open bankruptcy, active tax lien, recent judgment.
Average daily balance (ADB)	The average of each day's ending balance in a period. Shows how much cash usually sits in the account.
Balance sheet	A report of what a business owns, what it owes, and the difference (equity) on a given date.
Bank letter	A letter from the bank confirming the account and routing numbers. Used when there is no voided check.
Bank-original PDF	A statement downloaded directly from the bank's website or app, not a photo, scan or edited file.
Bank-verified connection	A secure, read-only link that pulls statements directly from the bank.
Bankruptcy (open or discharged)	A legal process for people or businesses that cannot pay debts. Open means still in progress; discharged means finished.
Bridge loan	A short-term first-lien loan that covers a gap in time until longer financing or a sale. Not a gap loan.
Broker	A company that connects merchants with funders and is usually paid by the funder when a deal funds.
Business debt schedule	A list of every business debt: lender, balance, payment, and end date.
Buy rate	The funder's price to the broker before any broker compensation. Internal only; never discussed with merchants.
Card processing statement	A monthly report from the company that processes the business's card sales.
Cash-out refinance	A new real estate loan larger than the old one, giving the owner cash from their equity.
Chargeback	A card payment reversed after a customer dispute.
Closer	The person (or founder) who presents offers to merchants. VAs do not present offers.
Collateral	An asset that secures a loan, such as equipment or property.
Commercial financing disclosure	A form some states require funders to give merchants before signing, showing cost and terms.
Comparable sales (comps)	Recent sales of similar nearby properties, used to support value.
Concentration	When one customer pays a large share of a business's revenue. A risk flag.
Confession of judgment	A contract clause where the borrower agrees in advance to a court judgment if they default. Banned in several states.
Consent (prior express written consent)	A person's signed or digital agreement to receive automated calls or marketing texts.
Consolidation	Paying off several advances or debts with one new funding.
Contingency	Extra money in a construction or rehab budget for surprises.
Credit band	A score range, such as 620 to 659. We record the band the merchant reports.
Credit repair	A service that disputes inaccurate, outdated or unverifiable credit items.

D to L

Term	Meaning
DBA	"Doing business as". The name customers see, when it differs from the legal name.
Debt-to-income (DTI)	Monthly debt payments divided by monthly income. Used in residential mortgages.
Decline reason code	The standard reason recorded when a file is declined.
Default	Failing to meet the terms of a funding contract, such as missing payments. Escalate any mention of it.
Desk lead	The person who approves funder matches and file decisions on the funding desk.
Disposition	The status you set on a call or lead after contact, such as "qualified" or "callback".
Do-not-call list (DNC)	National and internal lists of numbers that must not receive telemarketing calls.
Draw	Money released in stages as construction or rehab work is completed.
DSCR	Debt service coverage ratio. Income from a property divided by its debt payments. 1.20 means 20% more income than payment.
EIN	Employer identification number. A US business's tax ID.
Entity documents	Papers that show a business legally exists: articles of organization or incorporation, operating agreement.
Equity injection	Cash the buyer puts into a business purchase or project from their own funds.
Factor rate	A multiplier that shows total payback on an advance (for example, 1.3 means 130 repaid for each 100 received). You never quote it.
Factoring	Selling unpaid invoices to a company that pays most of the value now.
Funded	The merchant received the money.
Funder	The company that provides an advance or other non-loan funding.
Funder matrix	The internal list of funders and what each one accepts: credit, time in business, revenue, positions, industries, states.
Gap loan	A second or third lien loan placed behind an existing loan. Narqix does not place these.
General contractor (GC)	The licensed company that manages a construction project.
Gross deposits	Every deposit in the account in a period, before removing non-revenue items.
Ground up	New construction starting from land.
Hard inquiry (hard pull)	A credit check that can lower the score and that other lenders can see.
Holdback	The share of sales, or fixed payment, that goes to a funder.
Holdback burden	Monthly advance payments divided by monthly true revenue.
Interest reserve	Money set aside inside a construction loan to cover interest payments during the build.
ISO	Independent sales organization. Another name for a funding broker.
Lender	A company that makes loans (as opposed to buying future sales).
Letter of intent (LOI)	A signed early agreement on the main terms of a business purchase.
Lien	A legal claim on an asset until a debt is paid.
Line of credit (LOC)	A revolving limit a business can draw from, repay and draw again.
LTC	Loan-to-cost. The loan amount divided by the total project cost.
LTV	Loan-to-value. The loan amount divided by the property value.

M to R

Term	Meaning
MCA	Merchant cash advance. A funder buys a share of future sales. Not a loan.
MCA Bailout	A program for merchants struggling under existing advances, through payoff or restructured payments.
Merchant	The business owner seeking funding.
Month-to-date (MTD)	Bank activity from the first of the current month to today.
Negative day	A day that ends with the account balance below zero.
Net funding	The amount actually deposited after any payoffs or fees deducted by the funder.
NOI	Net operating income. A property's income minus operating expenses, before debt payments.
NSF	Non-sufficient funds. A payment returned because the account did not have enough money.
Nurture	Ongoing helpful, low-pressure contact with a lead who is not ready yet.
Offer	A funder's written proposal of amount and terms. Presented only by a closer or founder.
Opt-out	A person's request to stop calls, texts or emails. Honored immediately.
Overdraft	When the bank pays an item even though it takes the balance below zero, usually with a fee.
Payment burden (total)	All monthly debt payments divided by monthly true revenue.
Payoff letter	A funder's or lender's written statement of the amount needed to close an account.
Personal financial statement (PFS)	A form listing an owner's personal assets, debts and net worth.
Personal guarantee	A promise by the owner to be personally responsible if the business does not pay.
PITI	Principal, interest, taxes and insurance: the full monthly payment on a property loan.
Position	One open advance. The first advance is the first position, the next is the second position.
Position map	The list of every position: name, amount, frequency, first and last date seen.
Pre-qualification	An early check against screening minimums. It is not an approval and must never be called one.
Profit and loss statement (P&L)	A report of revenue, costs and profit for a period.
Purchase order (PO)	A buyer's official order for goods at an agreed price.
PO factoring	Funding to pay a supplier to fill a confirmed purchase order.
Reconciliation	Adjusting advance payments to match actual sales, when a contract allows it.
Renewal	Additional funding for an existing funded client.
Rent roll	A list of a property's units, tenants, rents and lease dates.
Restricted industry	An industry some funders avoid or limit. Listed in the funder matrix.
Revenue based financing (RBF)	Funding repaid as a share of revenue, rising and falling with sales.
Reverse consolidation	A funder deposits money regularly so the merchant can keep paying existing advances, then the merchant repays the new funder over a longer period. Often raises total cost.
Rehab	Renovation of a property.

S to Z

Term	Meaning
SBA 7(a)	A US government-backed small business loan program made through approved lenders.
Schedule of real estate owned (REO schedule)	A list of properties an investor owns, with values, loans and income.
Scope of work (SOW)	A line-by-line list of renovation work and costs.
Screening minimums	Narqix's internal rules for starting a file for a product. Not promises.
Scrub	The Narqix 20 point review of bank statements before submission.
Scrub sheet	The record of the scrub, with the 3-line summary at the top.
Seasonality	Regular busy and slow periods during the year.
Seller note	Part of a business purchase price that the seller lets the buyer pay over time.
Shotgunning	Sending a file to many funders at once without matching. Banned at Narqix.
Soft inquiry (soft pull)	A credit check that does not affect the score and is not seen by other lenders.
Speed to lead	The time between a lead's request and your first contact.
Stacking	Taking several advances at the same time, or applying for several credit cards at once.
Stips	Stipulations. Items a funder requires before it will fund.
Stop payment	An instruction to the bank not to pay a specific item. A stop on a funder payment is a serious flag.
Submission	Sending a complete, scrubbed file to an approved funder.
T-12	The trailing 12 months of a property's income and expenses.
Tax lien	A government claim on property for unpaid taxes. An auto-stop flag.
Term loan	A lump sum repaid with fixed payments over a set period.
Time in business (TIB)	How long the business has been operating, usually from its start date.
True revenue	Deposits from real sales, after removing transfers, advance proceeds, refunds and other non-revenue items.
UCC-1	A public filing that records a lender's or funder's claim on business assets.
UCC-3	A filing that changes or ends a UCC-1, for example after payoff.
Underwriter	The person or system at a funder that reviews and decides on a file.
Underwriting	The review of a file to decide whether and how to fund.
Use of funds	What the merchant will do with the money.
Voided check	A blank check marked "VOID" that shows the account and routing numbers.
White label	A service delivered under one company's brand while partners work behind it.
Working capital	Money used for day-to-day operations: payroll, inventory, rent.

Check yourself

1. What is the difference between a funder and a lender?
2. Define true revenue in one sentence.
3. What does a negative day mean?
4. Why is "pre-qualification" never the same as approval?
5. What is a position, and what is a position map?

© Narqix Academy