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Glossary

We've put together this glossary to help you understand any unfamiliar banking terms. Always feel free to ask your EH Business Development Officer any question or for additional explanation.

504 Loan: An SBA real estate loan for up to $7.5 million that requires a 10% investment by the borrower.

7(A) Loan: General purpose loan for up to $2 million that can be used for real estate, equipment, business purchase or expansion.

ACH (Automated Clearing House): An electronic funds transfer payment system used for activities such as payroll, direct deposit, tax refunds, consumer bills, tax payment, among others.

Analysis Statement: A summary report of banking activities and services that take place during a month. Includes average daily collected balance and service charge details.

Business Development Officer: This is your primary contact at EH for your loan. This person will answer any questions you have an guide you through the application process.

Cash Flow: The amount of cash generated and spent within a specific timeframe. Calculated by taking cash receipts minus cash payments. Often used to determine a company's financial health.

Cash Management: Coordinating payments and collections to more effectively use cash. Term also applies to the tools EH provides to help in this effort.

Certificate of Deposit: A fixed term investment vehicle. Withdrawals cannot be made without penalty until the end of the term. The longer the term, the higher the interest rate offered.

Closing: This is the point when the loan is approved, you sign the papers, and the funds are provided.

Collateral: Something of value, such as securities, deposits or other property, pledged to support repayment of a loan.

Commercial Lending: Lending of money to a business.

Community Bank: An independent, locally owned and operated banking institution.

Conditional Loan Commitment: Once you have completed the application process, the Conditional Loan Commitment is issued by EH and outlines any additional information or steps needed before the loan is granted.

Due-Diligence: As part of the approval process, EH reviews all of the financial information and documentation you provide.

FDIC (Federal Deposit Insurance Corporation): A U.S. corporation that insures deposits in a U.S. bank against bank failure. The FDIC insures up to $100,000 per depositor per bank as long as the bank is a member firm.

Image Statements: Statements that include scanned images of checks.

IOLTA (Interest On Lawyer's Trust Account): An account set up by an attorney to hold funds for a client if the amount is nominal or expected to be held for a short period. Interest earned is used to support law-related public service programs.

Line of Credit: A set loan amount that a borrower can draw down from at any time, as long as the maximum amount is not exceeded.

Liquid: Cash that is immediately available. Other assets can be considered liquid if they are quickly and easily convertible into cash.

Lockbox Services: A service where the bank sets up a post office box for receipt of mailed check payments. EH checks the box and processes any payments received.

Merchant Services: Processing services that enable businesses to accept credit card, debit card and other electronic payment methods.

Money Market: A deposit account with a higher rate of interest that allows withdrawals, but with a monthly transaction limit.

Non-profit Organization: An organization that supports or engages in activities of public or private interest without commercial or monetary profit.

Positive Pay: A fraud prevention service that enables a company to share its check register with the bank to allow payment only of checks listed in and verified against the register.

Pre-qualification: This is the part of the process where you define the type of loan and find out how much you qualify for based on your financial situation.

Remote Deposit Capture: A service that allows you to scan checks and make deposits without going into the bank. Images are digitally transmitted to the bank for posting and clearing.

SBA (Small Business Administration): The Small Business Administration is an independent federal government agency established to help small businesses. Their mission is to help Americans start, build and grow businesses.

SBA Express: A program designed for loans up to $250,000 and faster response times within 36 hours of receiving a completed application)

SBA Preferred Lender: SBA preferred lenders are chosen from among the SBA's best lenders and are given partial or full authority to approve loans for faster service.

Sole Proprietorship: A business owned by a single person.

Specialty Business: A select group of businesses that have unique situations or requirements. These can include car washes, day care centers, assisted living projects, hotel/motel, and independent insurance agents.

T-Bill (Treasury Bill): Short-term (one year or less) investment vehicle backed by the U.S. Government.

USDA Business Loans: Loans for the purchase of real estate, machinery and equipment or working capital only available to rural area businesses.

Wire Transfer: An electronic method of transferring money to others using the bank network.

Working Capital: A company's current assets minus current liabilities.

Zero Balance Account: An account that maximizes cash flow by only transferring in the funds needed to cover checks presented. Other funds remain in an interest bearing account.

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EH National Bank, 9701 Wilshire Blvd., Suite 101, Beverly Hills CA 90212       888.392.5265       © 2014 EH National Bank All Rights Reserved.
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