kiting: The act of writing a check for an amount greater than the deposit to get more credit extended to you. Kiting takes advantage of the delay between the payout and the deposit. Also, kiting can refer to changing the numbers on a check illegally. In contracts, kiting, also known as ballooning, refers to making up two contracts and trying to dupe the lender into accepting the one for the higher loan amount.
lessee: A person who leases equipment or property to use.
lessor: A person who allows another to lease equipment or property according to a specific agreement.
leverage: To use credit or borrowed funds in the stock market to improve your speculation capacity to get a better return on an investment. Using leverage to buy stock is tricky because, if speculation fails, the buyer will end up owing a great deal of money, both to the credit lender and the stock exchange.
lien: A charge that is placed on real estate or personal property to ensure that a debt is paid.
limited liability: When the owners of a company are not liable for any more than the capital they have invested in the company. Unlike those with limited liability, company owners are responsible for paying any debt the company owes even after capital invested has been satisfied.
loan-to-value ratio (LTV): A calculation mortgage lenders use to determine how much a person can actually afford to borrow. The loan-to-value ratio is an analysis of how much a borrower can borrow based on the value of his home (i.e. the amount he can afford to repay).
margin: The minimum amount that a business must earn in order to pay for itself.
market value clause: Used by property insurance brokers, the market value clause states that a person will be reimbursed for a damaged or destroyed item based on the market value (how much a buyer is willing to pay for it) instead of the purchase price. The market value clause tends to favor the insurers, rather than the insured.
maturity: The date on which a loan is due.
maturity date: The date on which a loan must be paid.
minimum wage: The lowest wage that employers are allowed to pay their employees as set by law.
net income: The income remaining after all taxes and expenses have been deducted.
non-commercial: An enterprise or organization that values other ideas and concepts rather than making a profit. This differs from a non profit organization in that seeking a profit is part of the business, just not the main part.
non-disclosure agreement (NDA): A legal agreement between parties that outlines the specific uses for the disclosure of certain confidential information.
non profit organization: A legally constituted organization whose primary objective is to support or to actively engage in activities of public or private interest without any commercial or monetary profit purposes.
non profit sector: An area of the economy that is made up of all the non profit organizations. It is also known as third sector, civic sector or voluntary sector.
not-for-profit corporation: A corporation created by statute, government or judicial authority that is not intended to provide a profit to the owners or members.
open-end: A fund which offers new shares as investors put money into it.
operating expenses: The costs a business has to maintain day-to-day activity. Operating expenses include inventory costs, rent, utilites, salaries, etc.
opportunity cost: The difference between a return on an investment that you chose and the one you chose to pass up. Opportunity cost represents the value of the opportunity lost in the face of the value of the opportunity taken.
option premium: The amount per share that a buyer must pay in order to exercise other options later.
options: The opportunity for a buyer to buy or sell some fixed amount of shares, generally 100, at a fixed price during a set amount of time, generally between 3 to 9 months.
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