Chapter 6 Debt Management FM3A

Refers to a financial transaction where a company sell its accounts receivable to a third party at a discount.

• Line of Credit

• Factoring

• Commercial Paper

• Floor Planning

Lenders will directly pay for large assets that are being procured by a distributor or retailer and be paid back when the assets are sold to a consumer.

• Commercial Paper

• Line of Credit

• Floor Planning

• Factoring

It is a commitment from a lender to pay a company whenever it needs cash, up to a preset maximum level.

• Line of Credit

• Floor Planning

• Commercial Paper

• Factoring

It involves creating a plan to effectively repay debts, typically through budgeting, prioritizing payments, negotiating with creditors, and possibly consolidating debts.

• Payment Management

• Floor Planning

• Accounts Payable Management

• Debt Management

It is an unsecured debt that is issued by a company and has a fixed maturity.

• Line of Credit

• Floor Planning

• Commercial Paper

• Factoring

A finance company will segregate a portion of a company’s warehouse area with a fence.

• Floor Planning

• Field Warehouse Financing

• Field Warehousing Technique

• Line of Credit

It is a contractual arrangement between two parties where the owner of an asset grants the right to use the asset for a specified period to another party in exchange for periodic payments.

• Sale and Leaseback

• Lease

• Line of Credit

• Commercial Paper

It is a fixed obligation to pay, usually at a stated rate of Php 1,000 per bond, that is issued by a corporation to investors.

• Securities

• Stocks

• Bonds

It is a loan that uses fixed assets or inventory as its collateral.

• Collateral Loans

• Short-term Loans

• Long-term Bonds

• Asset-based Loans

It is a form of short-term loan that is granted by a lending institution on the condition that the company will obtain longer-term financing shortly that will pay off the bridge loan.

• Asset-based Loans

• Bridge Loans

• Bridging Loans

• Long-term Loans