There’s a joke in the finance industry that says the profession isn’t really that hard, but is simply made to seem difficult to keep everyone else out.  

This isn’t quite true; the industry really is quite complex.  But there might be something to the claim that it seems deliberately confusing.

There are abbreviations, acronyms, and technical terms that only people in the finance industry will know. Mastering finance requires as much training as learning a foreign language.

But learning the proper jargon is a good entry into this world – learning it allows you to walk the talk and be part of the special crowd that uses the correct terminology.  

As jargon goes the finance industry speaks it pretty well. But pretty much every profession has some sort of special vocabulary that can use to communicate better, from medicine to lawyers.  The world of music has its own jargon as well as law enforcement. Even media has been accused of making up jargon to keep selling papers or gaining viewers.

For those interested in learning more about the finance industry, including the jargon, there are some terms that can be studied in-depth. These include:

  • Factoring. Conventional loans start with you, the potential borrower, approaching a lender. If an application is approved, you’ll have some funds that you’ll have to pay back. But factoring is the opposite. In factoring, the lender provides funds based on an invoice that a client assigns to a lender.
  • Asset-based lending. Here, the amount to be borrowed is based on a specific amount, such as the value of some items in inventory or real estate. The value will change, so the loan amount will also change.
  • Purchase order financing. The lender works with a supplier for an accurate amount based on the value of goods in an order. 

Learning more about these different solutions can be confusing at first but having a good conversations with lenders and other experts in the finance industry can lead to some innovative ways to achieve better cash flow.

For more information on financial solutions, visit 5 Star Funding Group.