If we see the business history of numerous of businessmen around the globe; one thing in common—they’re the only good and bad players of their companies, businesses or startups. Whatever they choose to progress is an outcome either positive or negative. Thus, entrepreneurs are the major player in any business. Although, there are other financial terms which play a critical role as entrepreneur plays itself. Here is short description to the each of the critical financial term discussed above—

Line of Credit

In informal words, LOC, Line of Credit is generally a line transferred from any financial institution (the one who gives money as borrowing) for an instance, Bank to the borrower, for an instance, business and since, the line is transferred to the borrower; he can opt to access a limited amount from the line of credit at the time of requirement. Describing more—in case of Line of credit, a complete amount is payable over a period of time; irrespective of the number of discretion done from the side of the borrower. The line of credit influences and shields the fluctuations in working capital either the businessmen is borrower or giver.

Personal Credit Score

Personal Credit Score of an entrepreneur can be taken as his/her goodwill and counted as a base on the subject matter of comprising loan to the business for business growth and development or not. Personal Credit score can be defined as a creditworthiness of a businessman in numbers. In the modern world, investors also lurk for checking the worthiness of business through personal credit score of businessmen in order to calculate the risk of getting returns in future. A competitive Personal Credit Score plays a role of barrier eliminator for the businessman anyway.

AIR and APR

AIR refers to the Annual Interest Rate and APR refers to the Annual Percentage Rate. In case, you are a businessman with any loan on shoulders or you’ve taken any loan in the name of the business, then, these abbreviations will be playing a critical role in evaluating your final profit or revenue of the business. From business balance sheet record to journal; they grasp a space. AIR is an expense which is made by the side of the business as an interest payable and APR is also an interest payable from the side of the business at the condition of capital accomplishment. Both the terms influence the business’s money on the basis of flexible rates.

 

Default—major blackspot

Default is exactly like how it sounds! A default is something that your company fails to do—a payment interest on the loan. Company or business to fail in paying any interest payment is black-spotted with the—Default or also, when a business fails to make a payment on the agreed period of time is named as Default. More often than not, Default takes the goodwill of the company’s slope downwards and deducts the growth level of business all of a sudden.

‘So, are you ready to play alongside all the above financial terms ready to fluctuate your business?’

Sources-

https://www.investopedia.com/terms/l/lineofcredit.asp

https://www.entrepreneur.com/article/25762