Acquisition
The purchase of a business. This may take the form of either the purchase of the equity to trade on the business in its current form or, alternatively, the purchase of certain, or all assets to be utilised by a different company.
Administration
A Court Order placing a company into the control of an Administrator to preserve the business and protect it from action by its creditors in order to allow reorganisation, or a more advantageous realisation of its assets.
Advances
In relation to receivables financing, this represents monies paid to the client on account of the purchase price of each debt. In relation to other facilities, the advance represents funds lent to the borrower against the value of the assets held as collateral.
Asset Based Funding
A financing facility utilising one, or a combination of, inventory, plant & machinery, and commercial property as collateral for advances.
Availability
The amount of finance available to a client as yet undrawn, at any given moment in time.
BACS (Bank Automated Clearing System)
An electronic means of funds transfer, by which cleared funds reach the beneficiary's bank account, three working days after they are remitted.
Balloon Repayment
The profile of the repayment of a term facility, whereby the repayments during the course of the facility are set lower than with a fixed repayment facility. They do not repay the principal in full, requiring a larger "balloon" final payment to clear the outstanding balance.
Boundaryless
GE's approach to offering its customers access to a wide range of its products and services within the GE Group.
Bullet Repayment
The profile of the repayment of a term facility, whereby the principal is repaid in one lump sum at the end of the facility, with only accrued interest being repaid in the meantime.
Business Review
A process, following our indicative offer, involving a visit to your premises to undertake a detailed review of your administrative systems and procedures. This enables us to have a better understanding of your business to assess how we can best tailor a solution to suit you. From this process a recommendation can be made to our Credit Committee.
Capital Repayment Holiday
The profile for the repayment of a term facility, whereby only accrued interest is covered initially with the repayments being subsequently increased, to repay the principal over the term of the loan.
Charge
A registered interest, filed at Companies House, in some or all of a company's assets. The charge may be "fixed" against a specific asset or "floating" over all assets to crystallise at some future point in time.
Chargeholder
An individual or corporate body holding an interest in assets of a company.
Client
The borrower.
Collateral
Assets offered by a client as security for the advance. Other assets may be included within the overall security offered, but collateral refers to the specific assets against which the advance is measured.
Confidentiality Letter
An agreement bwteeen two parties designed to restrict the ability of the signing party to disclose information to any non-connected party.
Concentration
The proportion of a company's sales ledger any suitable customer comprises.
Concentration Retention
The maximum proportion of a ledger GE is prepared to fund debts owing to any single customer.
Corporate Guarantee
A guarantee provided by one company (typically a Holding Company or Associate to GE in respect of a client company). To be called on in the event realisations from the charged assets of the company are insufficient to clear the company's liability to GE under the terms of the Agreement.
Covenant
A specific condition within a GE Agreement.
Credit Committee
The process of approving your tailored funding solution, which enables us to convert your indicative terms to a formal offer of funding.
CVA (Creditors Voluntary Arrangement)
A legal procedure whereby a scheme of arrangement to delay or reduce payment of debt is agreed by creditors and shareholders.
Critical to Quality (CTQ's)
Those aspects of any funding solution which are essential to you.
Cross Corporate Guarantee
A guarantee between two companies, both of which are clients, each guaranteeing the liability to GE under a Finance Agreement of the other.
Customers
Your trade debtors.
Debenture
A charge over an asset or assets of a company to be registered at Companies House.
Debt Turn
Calculation of effectiveness of collections activity - measured as the ratio of sales in any particular month to cash collected multiplied by 30.5 days.
Debt Service Coverage
A measure of the ability of a company to meet its debt repayments and interest charges out of earnings. Measured as the ratio of Earnings Before Interest, Tax, Depreciation and Amortization to Interest and Scheduled Debt Repayments.
Deed of Release
Required where a lender/chargeholder (typically a bank) has a pre-existing charge over the debts/assets to be funded. This document permits transfer of rights to in-coming funder.
Deferred Consideration
Portion of purchase price payable after sale has been completed.
Dilution
The level of credit notes and other deductions/adjustments to the sales ledger when measured as a percentage of sales. Typically measured monthly.
Desk Top Valuation
Form of asset valuation produced by a valuer from list of assets without the need for physical on-site review
Encumbrance
An interest, normally taking the form of a charge, in an asset.
Escrow
Funds required to complete a transaction paid to a solicitors client account and held pending completion are said to be "held in Escrow".
Export Debts
Debts owed by companies located outside of the United Kingdom.
Equity
The issued share capital of a business.
Financial Assistance
A company may not provide directly or indirectly financial assistance for the purchase of its own shares. Financial assistance means the reduction of the net assets of the company either at the time of acquisition or after the acquisition.
Financial Agreement
The document forming the basis of operation of GE facilities.
Fixed Assets
A term usually applied to a company's commercial property, plant & machinery, fixtures & fittings and vehicles.
Fixed Charge
A charge over a specified asset registered by a chargeholder at Companies House.
Fixed Charge Coverage
A measure of the ability of a company to meet its debt repayments and interest charges out of earnings. Measured as the ratio of Earnings Before Interest, Tax, Depreciation and Amortization less non-financed capital expenditure to scheduled debt repayments, interest and taxation charges.
Fixed Repayment
The profile for the repayment of a term facility where the principal outstanding is repaid by a pre-agreed amount at fixed intervals.
Floating Charge
A general charge over a class of or all of the assets of a company.
Foreign Currency Debts
Debts raised in any currency (regardless of location of customer) other than £ sterling.
GE Link
A secure online system, accessed via the internet which gives you up to date information regarding your facilities and enables you to undertake transactions with us.
Guarantor
An individual or company providing a guarantee in respect of a client's liability under a facility, which may arise.
Insolvency
A business which finds its liabilities are greater than its assets is technically insolvent.
Interest Cover
A measure of the ability of a company to meet its interest charges out of earnings. Measured as the ratio of Earnings Before Interest, Tax, Depreciation and Amortization to interest charges.
Inventory
Stocks in trade and work-in-progress of a business.
Invoice Discounting
A confidential revolving finance facility whereby the client sells their receivables to us, thereby creating a funding availability.
Landlords Waiver
Where assets subject to GE funding are in non-owned premises a Landlord's Waiver will be required to ensure GE have the ability to access and to realise these assets at all times.
Legal Fee Indemnity Letter
In transactional deals, a legal cost is incurred. A Legal Fee Indemnity Letter is required to enable costs to be recharged in the event the transaction does not complete.
Loan Subordination
Suspension of repayment of pre-existing loans made to the company, typically for a period of time.
MBI (Management Buy In)
The acquisition of a business by an external management team.
MBO (Management Buy Out)
The acquisition of a business by an internal management team.
Merger
A transaction to join together the assets of two or more separately owned businesses, into one group.
Mortgages Waiver
Where assets subject to GE Funding are in non-owned premises a Mortgagees Waiver will be required to ensure GE have the ability to access and to realise these assets at all times.
Personal Guarantee
A guarantee provided by a director of a company to GE. To be called upon in the event realisations from the assets of the company are insufficient to clear the company's liability to GE under the terms of the agreement.
Plating
Where GE provide funding against a company's Plant and Machinery, GE may require such a plate to be fixed to any such assets funded to indicate our interest in that piece of equipment.
Preferential Guarantee
Creditors who have a prior claim over assets of the company. Such creditors include HM Customs and Excise, Commissioners of the Inland Revenue and any charge Holder.
Principle
The outstanding balance of a loan net of any accrued interest.
Priorities Arrangement
An arrangement between chargeholders of a company confirming the apportionment of asset realisations in the event of that company's failure.
Proposal Form
Summary of company details, data and requirements provided to GE Representative at initial stages of negotiation.
Quality
GE's success with Six Sigma has exceeded our most optimistic predictions. Across the Company GE employees embrace Six Sigma's customer focused, data driven philosophy and apply it to everything we do. We are building on these successes by sharing best practices across all of our businesses, putting the full power of GE behind our quest for better, faster client solutions.
Receivables
Outstanding trade debts owed to you by your customers.
Receivership
Where a company finds itself in serious financial difficulties, a receiver may be appointed to collect and manage the assets of the company for the benefit of its creditors.
Registered Address
The legal address of the company for serving official documents - this must be in the United Kingdom.
Revolving Facility
A series of advances on which the amount outstanding varies from time to time. Collateralised financing on receivables or inventory is called revolving because the collateral and the outstanding balances change continually.
Scorecards
A method we use to capture information and measure variation in our clients CTQ's.
Security
This is a generic term relating to either the assets offered by the client, or the legal document relating to the assets. For example if commercial property were being taken as collateral for a loan, both the physical asset and the mortgage document could be referred to as security.
Six Sigma Quality
A vision of quality which equates to only 3.4 defects per million opportunities for each product or service transaction. A strive for perfection.
Term Facility
A funding solution whereby the repayment is structured as a loan over a fixed period of time. This may be a repayment on a fixed basis or incorporate a capital repayment holiday, a bullet or balloon payment.
Turnover
Revenues generated by a business through its trading activities. This does not include items such as proceeds from the sale of fixed assets.
Working Capital Funding
Advances made to assist the client with the settlement of costs incurred in the normal course of trade, pending receipt of payment from debtors.
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