Corporate Finance Tutorials
- Debt Capital
- Debt vs Equity
- Types of Credit Facilities
- External Sources of Finance
- Letter of Credit (LC)
- Line of Credit
- What is Money Market?
- Callable Bonds
- Mezzanine Financing
- Subprime Loans
- Leveraged Finance
- Microfinance Loan
- Stocks vs Bonds
- Loan to Value Ratio – LTV
- Loans vs Advances
- Lending vs Borrowing
- Imputed Interest
- Mortgage Banker vs Broker
- Mortgagee vs Mortgagor
- Best Money Market Books
- Cost Center Vs Profit Center
- Economic Order Quantity Eoq
- Buying Vs Leasing
- Mortgage Vs Hypothecation
- Lease Vs Rent
- Deficit vs Debt
- Internal Reconstruction Vs External Reconstruction
What is Debt Capital?
Debt capital is the part of the total capital invested in the business that is raised through loans. The company has to repay the loan in the future date as per the agreement with the banks or investors. Debt Capital can be divided into two parts - long-term debt and short-term debt.
Top topics discussed in debt capital are as follows -
- What is the difference between debt capital and equity capital?
- What are the types of credit facilities?
- What are the external sources of finance?
- What is the money market?
- What is Mezzanine Financing?
- What is a subprime loan?
- What is the difference between stock vs bonds?
- What are callable bonds?
- Difference between Lease vs Rent?
Debt vs Equity
Debt capial is a loan and the creditors can only claim the loaned amount plus the interest. Whereas Equity is sharing the ownership of the company with individuals which allow them to receive dividends & voting rights.
Types of Credit Facilities
This is a guide to Types of Credit Facilities - Short-Term Credit Facility and Long-Term Credit Facility. Here we discuss its features and usages in various stages of the business.
External Sources of Finance
External sources of finance are financing options external to the business like equity capital, venture capital, debt capital, preferred stocks and more.
Letter of Credit (LC)
Letter of Credit LC is a written commitment to pay which is issued by a buyer’s or importer’s bank i.e. the issuing of LC from bank to the seller’s or exporter’s bank i.e. accepting bank, negotiating bank or paying the bank.
What is Money Market?
Money Market is a market segment where financial institutions and governments manage their short-term cash needs.
A callable bond is a bond with a fixed rate where issuing company has the right to repay the face value of the security at a pre agreed value prior to maturity of the bond.
Mezzanine financing definition is nothing but a kind of financing that has both features of debt capital and equity financing that provides lenders the right to convert its loan into equity in case of a default (only after the private equity companies and other senior debts are paid off)
Subprime Loans or Subprime lending refers to the practice of issuing loans to those people who are financially backward or who have a higher probability of missing the repayment schedule due to various uncanny situations in business, work or life.
Microfinance loan is offering a tiny loan to people who are unemployed or have low income.
Stocks vs Bonds
Stocks and Bonds are used for making quick money or even from the perspective of keeping its investments since the prospects of growing money are relatively higher in this case.
Loan to Value Ratio – LTV
Loan to value ratio is one of the most important risk assessment tools in financial institutions. And before lending the money to the borrowers, lenders examine before approving the mortgage.
Mortgage Banker vs Broker
Mortgage banker is “an individual, firm or corporation that originates, sells or services loans secured by mortgages.” Whereas Mortgage Brokers is a broker as “an independent real estate financing professional that specializes in the origination of mortgages.”
Mortgagee vs Mortgagor
Mortgagee and Mortgagor are the integral part of Loan Business which includes the transfer of funds to the required person/institution, pledging of assets to the lender by the receiver, costs like settlement costs, interest costs etc.
Best Money Market Books
This post on Money Market Books is to give you a heads up on Money Market & a sneak peek in what those books propose and their best takeaways.
Cost Center Vs Profit Center
A cost center is a subunit of a company which takes care of the costs of that unit. Whereas profit center is a subunit of a company which is responsible for revenues, profits, and costs.
Economic Order Quantity Eoq
Economic order quantity can be defined as a formula through which a company can find out how much it has to produce or order by lowering the carrying cost or holding cost and ordering cost.
Buying Vs Leasing
Buying is complete ownership transfer of a product/asset. Whereas leasing is getting only to use the product/equipment.
Mortgage Vs Hypothecation
A mortgage is a charge against immovable properties like land, building, warehouse etc. Whereas Hypothecation is a charge against movable properties cars, accounts receivables, stocks etc.
Lease Vs Rent
Lease is entering into a contract with the lessee for a long period to use an asset/property. Whereas rent is entering into an agreement with the tenant for a certain period to use an asset/property.