Glossary – B

A B C D E F G H I J K L M N O P Q R S T U V W XYZ

B

Balance Sheet
Financial statement that presents a “snapshot” of what the business owns, what it owes, and what equity it has on a given date.

Balloon Mortgage
A loan which is amortized for a longer period than the term of the loan. Usually this refers to a thirty-year amortization and a five year term. At the end of the term of the loan, the remaining outstanding principal on the loan is due. This final payment is known as a balloon payment.

Balloon Payment
The final lump sum paid at the maturity date of a balloon mortgage.

Bargain Purchase Option
A lease provision allowing the lessee, at its option, to purchase the equipment for a price predetermined at lease inception, that is substantially lower than the expected fair market value at the date the option can be exercised.

Big-Ticket
A market segment, generally dominated by leveraged leases, represented by lease financings over $2 million.

Biweekly Payment Mortgage
A plan to reduce the debt every two weeks (instead of the standard monthly payment schedule). The 26 (or possibly 27) biweekly payments are each equal to one-half of the monthly payment required if the loan were a standard 30-year fixed-rate mortgage. The result for the borrower is a substantial savings in interest.

Blanket Mortgage
A mortgage covering at least two pieces of real estate as security for the same mortgage.

Bond Financing
Type of financing that is a promise to repay the principal along with interest on a specified date.

Borrower (Mortgagor)
One who applies for and receives a loan in the form of a mortgage with the intention of repaying the loan in full.

Bridge Loan
Loan is used for a short duration of time until permanent financing is set in place. They are an optimal solution to a timely acquisition or business opportunity because they allow the investor to act decisively during time-sensitive proposals.

Broker
An individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services.

Business Inventories and Sales
These figures measure the inventories and sales of manufacturing, wholesalers, and retail establishments. These figures are released monthly by the Bureau of Census. In most cases, an increase in these numbers indicates an expanding economy which could be inflationary. Bond Market Moves Down In Price.

Buy-down
When the lender subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires.