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Items owed by an organization or claims against its assets. Examples include: accounts payable, accrued salaries and benefits, accrued payroll taxes, deferred revenue, lines of credit, construction lo
A legal claim against an asset which is used to secure a loan and which must be paid when the asset is sold. Liens can be structured in different ways. In some cases, the creditor will have legal clai
LINE OF CREDIT (LOC)
A loan in which the lender allows advances up to a specific amount over a specific period of time until the maturity date. It is usually revolving, meaning amounts repaid can be re-borrowed up to the
LIQUID NET ASSETS
The estimated amount of unrestricted net assets NOT invested in property & equipment (P&E) or board-designated reserves. Essentially this is the liquid amount of unrestricted net assets available to s
A measure of how much cash and “near cash” (assets readily convertible to cash such as marketable securities) an organization has available, usually measured as the amount of assets in cash or cash eq
Limited liability company, a business structure that is a hybrid of a partnership and a corporation. Its owners are shielded from personal liability, and all profits and losses pass directly to the ow
Legal session where final loan documents are executed. The loan may or may not be funded at this time.
Documents containing the terms of the loan and outlining the rights and obligations of the borrower and the lender. May include the following: the loan agreement which details the terms of the loan in
The amount of time over which a borrower is expected to repay the loan. The loan term may not be the same as the amortization, which determines the periodic repayment amounts and whether there is a la
The ratio of the amount of money a lender is willing to lend divided by the appraised or other value of the property.
Debt obligations due in longer than one year. It includes multi-year term loans, mortgage loans, and capitalized long-term leases.
LONG-TERM GRANTS & PLEDGES RECEIVABLE
Money owed to an organization in more than a year for goods and services it has sold or that have been committed to the organization as a grant, donation or pledge. The organization will not get the m
The date on which a loan obligation must be repaid.
Often the consequence of misguided practices perpetuated by nonprofit organizations and their supporters alike.
MONTHS OF CASH
The number of months the organization could operate with current cash reserves. The cash position at some point in time (usually at fiscal year end) divided by the average monthly operating expense be