# Business loan glossary

Source: https://businessloanbroker.ai/glossary/
Site: BusinessLoanBroker.ai (powered by Levr)

> Plain definitions of the terms on a business loan offer, from APR and factor rate to DSCR, UCC liens and stips, each with a worked example.

This glossary explains the words lenders use on business loan offers in plain language, with a worked example for each one. Every term page tells you what the term means, how it is calculated or used, what lenders consider normal, and what to watch for before you sign.

Start with the term you just saw on a term sheet or in an email from a lender. If you are comparing offers, read [APR](https://businessloanbroker.ai/glossary/apr/) and [factor rate](https://businessloanbroker.ai/glossary/factor-rate/) first, because they are the two ways lenders express cost and they are not interchangeable. If a lender has asked for more paperwork, [stips](https://businessloanbroker.ai/glossary/stips/) explains what they want and why. For the bigger picture, our [guide to reading a term sheet](https://businessloanbroker.ai/guides/how-to-read-a-term-sheet/) walks through a full offer line by line.

## Key facts
- **Terms covered:** 14, from APR to working capital
- **Each page includes:** Definition, worked example, typical ranges, what to watch for
- **Best place to start:** APR and factor rate if you are comparing offers

## How should you use this glossary?

Look up the term you do not recognize, read the worked example, and check the offer in front of you against the typical ranges. If a number on your offer sits outside the normal range, that is your signal to ask the lender why before you sign. The glossary pairs with our [calculators](https://businessloanbroker.ai/tools/), which turn the definitions into numbers for your own loan. You can apply here, or ask your AI assistant to read these pages and apply for you through our [MCP server](https://businessloanbroker.ai/agents/).

## Why do these terms matter?

Most expensive mistakes in business borrowing come from one misunderstood term. Owners compare a 1.25 factor rate with a 12% APR as if they were the same, miss a [personal guarantee](https://businessloanbroker.ai/glossary/personal-guarantee/) in the fine print, or sign without knowing a [UCC lien](https://businessloanbroker.ai/glossary/ucc-lien/) will block their next loan. Ten minutes with the right definition can change what you agree to and what it costs you.

## Questions and answers
**Which is more important, APR or factor rate?**

APR, because it puts every offer on the same yearly scale. A factor rate only tells you the total payback, not how fast you pay it. Convert any factor rate to APR before you compare it with a loan.

**Are these definitions the same in Canada?**

Mostly yes. APR, DSCR, collateral and amortization mean the same thing in both countries. Canada uses PPSA registrations instead of UCC liens, and Canadian prime is set by Canadian banks, but the ideas are the same.

**Can my AI assistant use these pages?**

Yes. Each page is written so an assistant can lift a single section as a correct answer. If you connect your assistant to our MCP server it can also pull your actual offer terms and explain them against these definitions.

## Related
- [How to read a business loan term sheet](https://businessloanbroker.ai/guides/how-to-read-a-term-sheet/)
- [Business loan rates explained](https://businessloanbroker.ai/guides/business-loan-rates-explained/)
- [APR versus factor rate: how to compare them](https://businessloanbroker.ai/guides/apr-vs-factor-rate/)
- [Merchant cash advance true cost calculator](https://businessloanbroker.ai/tools/mca-true-cost-calculator/)

## Apply
Apply for the business: https://apply.businessloanbroker.ai/signup?utm_source=direct&utm_medium=organic&utm_content=md-glossary
MCP server for AI agents: https://mcp.businessloanbroker.ai/mcp (docs: https://businessloanbroker.ai/agents/mcp/)