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(See also Closed-End Lease.) A lease which provides the provision for extending the lease on predetermined terms after a set period of time. Operating Lease Any lease which is not a capital lease. From a financial reporting perspective, it is a lease that has the characteristics of a rental agreement and also meets certain criteria established by the FASB. Such a lease is not required to be shown on the balance sheet of the lessee. The term is also used to refer to leases in which the lessor has taken a significant residual position in the lease pricing and, therefore, must salvage the equipment for a certain value at the end of the lease term in order to earn its rate of return. debt consolidation and credit

Operating Foundation

A 501(c)(3) organization classified by the IRS as a private foundation whose primary purpose is to conduct research, social welfare, or other programs as determined by its charter or governing body. Most of the foundation funds are used for the foundation s own programs. Operating foundations may award grants, however the amount of the grants is generally small. check credit rating

Original Issue Discount

Some maturities of a new bond issue that have an offering price substantially below par; the appreciation from the original price to par over the life of the bonds is treated as tax-exempt income and is not subject to capital gains tax. Partnership Business association of two or more people. There are two types of partnerships, the general and the limited partnership. improve credit rating

Par Value

The face value or principal amount of a bond, usually $5, 000 due the holder at maturity. It has no relation to the market value. For pricing purposes it is considered 100. Payments in Arrears A payment stream in which each payment is due at the end of each period during a lease or loan period. Performance Contracts (See shared savings agreements). credit online rating report

Personal Financial Statements

Individual s balance sheet and tax returns for three years. (Sometimes required by prospective investors/lenders of the founders/managers of the start-up or closely held businesses.) Positive Cash Flow Cash flow is the total money received and paid out by a company during a specific period of time. A company s cash flow is positive when the money received (deposited or saved) exceeds the money paid out or expensed. credit score rating scale

Preferred Stock

A corporate security that has preference over common stock in receiving dividends and as to assets. Its dividend is usually stated as a fixed percentage of par value or as a stipulated sum each year, but the company has no legal liability to pay it if the company has not earned the money to pay it. Cumulative: if the dividend is not paid when due, it accumulates as a backlog that must be paid before common stockholders receive dividends. Noncumulative: if the dividend is missed, it is not required to be paid at a later time. Participating: can enjoy additional dividends after the common stockholders are paid a stated amount. Nonparticipating: cannot receive any dividends other than the fixed amount offered. Voting: has voting privileges. bad card credit credit people

Prime Rate

The interest rate that banks lend to their best customers. This rate is determined by the banks themselves and is published in financial periodicals. Private Deals These are deals or loans made outside the normal processes, usually by individuals to small businesses or other individuals, even family members. See http:// .com Private Foundation free credit rating report

These are nongovernmental, nonprofit organizations with funds usually provided by a single source (such as an individual, family, or corporation). Their programs are managed by its own trustees or directors. Private foundations maintain or aid social, educational, religious, or other charitable activities serving the common welfare, primarily through the making of grants. credit rating scale

Privately Held

Describes a corporation which does not offer shares to the public. It does not have to publish an annual report or comply with SEC regulations. (There are some exceptions.) Private Loans These are loans usually made by individuals instead of public companies. See http:// .com Public Charity These are nonprofit organizations that qualifies for tax-exempt status under section 501(c)(3) of the IRS code and are the recipients of most foundation and corporate grants. Some public charities also make grants. bad credit rating

Purchase Option

A provision by which a lessee has the right to purchase the equipment at the end of the lease. The purchase option may be stated as a specific dollar amount or at fair market value. Ratings Various alphabetical and numerical designations used by institutional investors, Wall Street underwriters, and commercial rating companies to give relative indications of bond and note creditworthiness. Standard Poor s and Fitch Investors Service Inc. use the same system, starting with their highest rating of AAA, AA, A, BBB, BB, B, CCC, CC, C, and D for default. Moody s Investors Services uses Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C, and D . Each of the services use + or - or +1 to indicate half steps in between. The top four grades are considered Investment Grade Ratings. credit rating agency

Residual Value

The value of an asset at the conclusion of a lease. Return on Investment also known as ROI The return per dollar of investment used to measure the efficiency with which capital resources are employed. Revenue Bonds Revenue bonds are issued to finance a specific revenue generating project. Revenue bonds may be backed by an insurer but are typically secured solely by the revenue generated through the project for which they are issued. For instance, a bond could be issued to retrofit an old building with new energy saving technologies such as windows, lights, or heating systems. Energy cost savings would then be used to pay back the bond issue. However, if the bond was not insured and energy savings were not realized the bond would default. credit rating canada

Revolving Line of Credit also known as Revolvers

a loan in which the amount of the money borrowed is constantly changing due to the repayment and re-borrowing of the monies. A working capital credit line or credit card are examples of a revolving loans. While revolvers are normally open for one year, they are demand loans and may be called at any time during the loan period by giving the borrower notice. bad credit mortgage rating

RFP

An acronym for Request for Proposal. RFPs is part of a common bidding process in the public sector and for large projects. They normally list the project specifications and procedures, and are issued to agencies or organizations that might be qualified to participate. Sale and Leaseback An arrangement where equipment is purchased by a lessor from the company owning and using it. The lessor then becomes the owner and leases it back to the original owner, who continues to use the equipment. good credit rating

Share of Stock

A unit of ownership in a corporation, which can be held privately or publicly. Short-term Debt Loans that are to be repaid within one year. Shared Savings Agreement The installing company/finance source installs the equipment and receives payments from the end-user/host company based on the energy savings produced by the equipment. There are two types of agreements, fixed and . true shared savings contracts. Fixed shared savings contracts define the savings based on engineering studies or one-time verifications of savings at the time of project completion and the savings-based payment is not subject to change following project acceptance by the customer. True shared savings contracts require the savings be verified periodically and the saving-based payment is subject to change. Shared Savings Agreements are considered by many to be off balance sheet financing . credit score rating chart

Simple Payback

The time required to recover the capital investment out of the savings of the installed energy efficiency equipment. It does not take into consideration any savings beyond the payback period; therefore it tends to penalize long life projects and favor projects that offer high savings over a short time. It is commonly used when funds are limited. Sinking Fund credit mortgage rating poor

Money set aside on a periodic basis to retire term bonds at or prior to maturity. Sole Proprietorship A business firm owned by only one person and operated for his/her profit. Stipulated Savings Energy savings values which are stipulated based on engineering calculations using typical equipment characteristics and operating schedules developed for particular applications, without on-site testing or metering. This may be a cost effective approach for lighting efficiency and controls projects. Also know as deemed savings. good credit rating score

Stream Rate (Interest)

A stream rate, also known as the running rate of interest, may be quoted on leasing transactions. It reflects only the payment stream and excludes the cost of the purchase option at term-end, so it will usually be lower than the APR. This is not an incorrect rate, but it may be misleading when comparing it with an APR. Subordinated Debt Debt whose claims on assets are somehow inferior to the claims of another class of debt. The superior debt has first claim to the assets used as collateral for the debt, e.g., a second mortgage on a home gets nothing until the first mortgage has been fully satisfied in case of default. poor credit rating loan

Super ESPC

To streamline the procurement process, the U. S. Department of Energy s Federal Energy Management Program (FEMP) awarded indefinite-delivery, indefinite-quantity (IDIQ) contracts the Super ESPCs to a number of energy service companies (ESCOs). These competitive awards were made in compliance with all applicable Federal Acquisition Regulations (FAR) requirements. There are two types of Super ESPCs: Regional, all-purpose Super ESPCs and Technology-Specific Super ESPCs. Regional Super ESPCs are intended for implementing a wide range of technologies. And the Technology-Specific ESPCs give Federal agencies access to new or emerging technologies that are not yet fully established in the marketplace but have outstanding potential for saving energy and money at Federal sites. bank credit rating

Synthetic Operating Lease

A lease agreement that qualifies as a leasing transaction for purposes of financial reporting and as a secured financing for purposes of income tax reporting. These leases are structured to pass FASB 13 tests for operating leases and are sometimes used for equipment which might not normally hold a high residual value necessary for traditional FASB 13 operating leases (e.g., lighting, HVAC, etc.). credit card for poor credit

Tax Exempt Energy Service Agreement

Similar to the Energy Service Agreement above (see Performance Contracts section), this fixed payment shared savings agreement can combine the rate benefits of a tax exempt financing vehicle with the marketing advantages of a shared savings agreement, and may be popular with schools. Tax Lease / True Lease A lease where the lessor can claim tax incentives of ownership and the lessee can claim rental payments as tax deductions. Because the final decision to purchase the leased equipment is deferred until the end of the lease contract (at its then fair market value ), monthly rental payments are usually expensed for tax purposes. business credit rating

Term Loan

A loan which is repaid over a predetermined period of time longer than one year. Rates may be floating or fixed. Time Value of Money All money commands interest, either imputed or explicit. Interest costs are a function of the interest rate and the time for which the money is being rented (used). Thus, time costs money. TRAC Lease This is a tax-oriented lease of titled motor vehicles or trailers that contains a terminal rental adjustment clause (fixed purchase amount) and otherwise complies with the requirements of a true lease. moodys credit rating

Undercapitalization

Starting a new enterprise with too little money to carry it through the beginning stages of development. Trustee A bank designated as the custodian of funds and official representative of bondholders or lessor. Trustees are appointed to insure compliance with the trust indenture and represents bondholders or lessors to enforce their contract with the issuer. credit card with bad credit

Unsecured Bonds monebaggassemonebaggasse

Debt bonds issued on the general credit of a company. Unsecured Loan Loan granted solely on the strength of the maker s signature. Venture Capitalist An investor who provides early financing to new ventures--often technology-based--with an innovative product and the prospect of rapid and profitable growth. Warrant An option to buy a certain amount of stock for a stipulated price that is transferable--it can be traded. personal credit rating