Small Business Banking Key Terms

Learn small business banking key terms to enhance your business banking

Many new business owners struggle with small business banking key terms. Banks and financial institutions typically use terminology that most people are unfamiliar with. However, it is very important for small business owners to understand all of the terms from small business banks fully before carrying out their small business banking.

Small businesses carry out several different types of small business banking. They write checks with checking accounts, save money with savings accounts, and borrow money with small business loans. Each type of transaction has its own set of terms. When thinking about how you can better educate yourself on small banking key terms, consider the following:

1. Small business owners typically handle their own banking for small business needs.

2. Small business owners keep their own small business banking records.

3. Small business banking terms are crucial to banking contracts.

 

Understand small business banking key terms for loans

Loans help begin small businesses and expand them. It is very important to understand all of the terms used in the wording of your small business banking loans. Many business owners sign a promissory note, which is a contract promising to repay the amount borrowed at a given time and under certain conditions. The promissory note may be secured or unsecured. Secured notes give the lender something to take if the borrower does not repay the note. In unsecured notes, the lender examines the borrower's cash flow and profits of business for repayment.
Try: Look for more banking terms and small business banking information at AllBusiness. Gain access to loan key terms for small business banking services at Business Town.

Discover terms associated with small business banking accounts

Small business owners have small business banking accounts. These accounts also have a set of terminology tied to them. An account is credit established under a certain name. One usually establishes the account through depositing funds. Accounts have account activity, which is any activity that occurs with the account. This includes deposits, debits, finance charges, and new balance. The term insufficient funds means that the account balance is not enough to cover the amount of the check that you have written.
Try: Get more terms and information about small business banking and small business banking service at Buz Gate. View a banker's glossary at American Banker.

Learn terms that describe your small business banking status

Some terms that you may hear that describe you and your business are assets, debt, equity, liabilities, net worth, and economic activity. Net worth describes the business assets minus the liabilities. Bankers want to know about your business and financial means before loaning you money or investing in your work. Your assets contribute to the well-being of your business. Debt is the money that you owe in the form of a loan. Equity is the money that you or someone has invested in the business. Economic activity is the making and distributing of services or goods by the business.
Try: View business banking terms as defined by Bank of America for best business banking. Gain access to basic banking for small businesses terms from Virtual Business Incubator.

 

• When looking over any contract or legal document about banking services for small businesses given to you by your financial institution, be certain to check for key term understanding. If you are uncertain about any terms listed in the document, consider taking it to your lawyer for review.

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