Glossary
AI Finance Glossary
Plain-English definitions of AI, accounting, and SaaS-finance terms.
Categories
A
Amortization
The systematic allocation of an intangible asset's cost or a loan's principal over a defined period.
Asset-Based Lending
Commercial lending facility secured by specific business assets, typically receivables and inventory.
B
Basel III
International banking regulatory framework strengthening capital requirements and risk management for banks post-2008 crisis.
Bridge Loan
Short-term financing used temporarily until permanent long-term funding is arranged.
Buy Now Pay Later
Point-of-sale financing allowing consumers to split purchases into installments, often interest-free.
C
D
Debt-to-Equity Ratio
A leverage ratio comparing total debt to shareholders' equity, measuring how much a company relies on borrowed funds versus owner capital.
Debt-to-Income Ratio
A personal finance metric comparing monthly debt payments to gross monthly income, used by lenders to assess borrowing capacity.
Dodd-Frank
U.S. financial reform law enacted in 2010 expanding regulation of financial institutions, derivatives, and consumer protection.
E
F
FICO Score
The credit scoring model developed by Fair Isaac Corporation, the most widely used by lenders to evaluate consumer creditworthiness.
Factoring
Selling accounts receivable to a third party at a discount in exchange for immediate cash.
Federal Funds Rate
Interest rate at which banks lend reserves to each other overnight, set by the Federal Reserve.
L
M
Machine Learning in Finance
Application of algorithms that learn from financial data to make predictions and automate decisions.
Mezzanine Financing
Hybrid debt-equity capital subordinated to senior debt, carrying higher yields and often warrant coverage.
N
P
R
S
SOFR
Secured Overnight Financing Rate, the primary U.S. replacement for LIBOR, based on overnight Treasury repo transactions.
Subordinated Debt
Debt that ranks below senior obligations in payment priority in the event of default or liquidation.
Syndicated Loan
Large loan provided jointly by a group of lenders to a single borrower, arranged by a lead bank.