The Credit and Lending Glossary is a collection of the credit and lending terms from my work financing consumer brands and small businesses, including at 📝Assembled Brands, for founders and investors navigating how lenders decide.
Glossary
A
- 📝Assembled Brands Credit Box — The lending criteria 📝Assembled Brands uses to finance US emerging consumer brands, including 50–200% annual growth, at least $1m in inventory and receivables, strong repeat purchases, and no other secured debt.
C
- 📝Cash Distribution Agreement — An electronic legal agreement and system that automatically splits cash proceeds from credit card transactions or other deposits among multiple accounts, like an escrow for recurring payments.
- 📝Credit Box — The objective set of requirements, or investment criteria, an underwriter uses to decide whether to make a loan.
- 📝Credit Committee — A small group that reviews an underwriter's work to make a go/no-go decision on an investment.
I
- 📝Investment Committee — The body chartered by a fund's investors to approve its investment objectives and keep the portfolio within its 📝Credit Box.
L
- 📝Liquidity — How readily assets can be turned into cash to meet obligations, illustrated with a clip from Schitt's Creek.
M
- 📝Merchant Account Escrow — A replacement merchant account that charges customers' credit cards and distributes the cash to multiple bank accounts according to a 📝Cash Distribution Agreement.
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- 📝Net Orderly Liquidation Value — The net value of a set of assets in an orderly sale, which a lender uses to decide how much to lend against them, similar to the 📝Assembled Brands Financeable Equation.
P
- 📝Personal Guarantee — A promise by a person or organization to accept responsibility for another party's debt if the debtor fails to pay it.
S
- 📝Schumer Box — The standardized table in credit card agreements and solicitations that discloses the card's rates and fees, including its APRs, grace period, and annual, late, and cash advance fees.
- 📝Securitizing Micro Cash Flows — Financing small recurring cash flows, such as merchant cash advances or music catalog royalties, by detecting deposits and redistributing them automatically at or near the source.
- 📝Small Business Credit Score — A concept for a new FICO for local businesses that judges creditworthiness through vertical-specific financial models and growth potential rather than numbers alone.
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- 📝Venture Factoring — Lending against future invoices a sales pipeline can reasonably be expected to produce, taken to its extreme for a completely new product.
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- 📝Working Capital — Current assets minus current liabilities, which for an emerging consumer brand means inventory and receivables minus payables, credit cards, and other debt.