Loan Participation Note

A loan participation note (LPN) is a fixed-income security that permits investors to buy portions of an outstanding loan or package of loans. LPN holders participate on a pro-rata basis in collecting interest and principal payments, and are similarly exposed to a proportional risk of default.Banks, credit unions, or other financial institutions often enter into loan participation agreements with local businesses and may offer loan participation notes as a type of short-term investment or bridge financing.

Errors And Omissions Insurance

Errors and omissions (E&O) insurance is a type of professional liability insurance that protects companies, their workers, and other professionals against claims of inadequate work or negligent actions.

Depository Transfer Check

A depository transfer check (DTC) is used by a designated collection bank to deposit the daily receipts of a corporation from multiple locations. Depository transfer checks are a way to ensure better cash management for companies, which collect cash at multiple locations.Data is transferred by a third-party information service from each location, from which DTCs are created for each deposit location. This information is then entered into the check-processing system at the destination bank for deposit.

Deficit Spending Unit

A deficit spending unit is an economic term used to describe how an economy, or an economic group within that economy, has spent more than it has earned over a specified measurement period. Both companies and governments may experience a deficit spending unit.

Days Sales Of Inventory

The days sales of inventory (DSI) is a financial ratio that indicates the average time in days that a company takes to turn its inventory, including goods that are a work in progress, into sales. DSI is also known as the average age of inventory, days inventory outstanding (DIO), days in inventory (DII), days sales inventory, or days inventory and is interpreted in multiple ways. Indicating the liquidity of the inventory, the figure represents how many days a company’s current stock of inventory will last. Generally, a lower DSI is preferred as it indicates a shorter duration to clear off the inventory, though the average DSI varies from one industry to another.

Subprime Mortgage

A subprime mortgage is one that’s normally issued to borrowers with low credit ratings. A prime conventional mortgage isn’t offered, because the lender views the borrower as having a greater-than-average risk of defaulting on the loan.Lending institutions often charge interest on subprime mortgages at a much higher rate than on prime mortgages to compensate for carrying more risk. These are often adjustable-rate mortgages (ARMs) as well, so the interest rate can potentially increase at specified points in time.

Venture Capital Funds

Venture capital funds are pooled investment funds that manage the money of investors who seek private equity stakes in startups and small- to medium-sized enterprises with strong growth potential. These investments are generally characterized as very high-risk/high-return opportunities.In the past, venture capital (VC) investments were only accessible to professional venture capitalists, but now accredited investors have a greater ability to take part in venture capital investments. Still, VC funds remain largely out of reach to ordinary investors.

Holding Period Return

Holding period return is the total return received from holding an asset or portfolio of assets over a period of time, known as the holding period. It is generally expressed as a percentage and is particularly useful for comparing returns on investments purchased at different periods in time.

Export Credit Agency

An export credit agency offers trade finance and other services to facilitate domestic companies' international exports. Most countries have ECAs that provide loans, loan guarantees and insurance to help eliminate the uncertainty of exporting to other countries.The purpose of ECAs is to support the domestic economy and employment by helping companies find overseas markets for their products. ECAs can be government agencies, quasi-governmental agencies or even private organizations—including the arms of commercial financial institutions.

Held By Production Clause

"Held by production" is a provision in an oil or natural gas property lease that allows the lessee, generally an energy company, to continue drilling activities on the property as long as it is economically producing a minimum amount of oil or gas. The held-by-production provision thereby extends the lessee's right to operate the property beyond the initial lease term. This provision is also a feature of mineral property leases.

Held-To-Maturity

Held-to-maturity (HTM) securities are purchased to be owned until maturity. For example, a company's management might invest in a bond that they plan to hold to maturity. There are different accounting treatments for HTM securities compared to securities that are liquidated in the short term.

Held-For-Trading Security

A held-for-trading security is a debt or equity investment that investors purchase with the intent of selling within a short period of time, usually less than one year. Within that time frame, the investor hopes to see appreciation in the value of the security and sell it for a profit.Because of accounting standards, companies have to classify investments in debt or equity securities when they are purchased. Other than held-for trading, other options include held-to maturity or available for sale.