Search the Glossary
A B C D E F G H I J L M N O P Q R S T U V W View all
SBA 504

Guaranteed loan program administered by the U.S. Small Business Administration for the acquisition of fixed assets for small business expansion or modernization.

Schedules And Notes

A supporting set of calculations, with explanations, that show how figures in a financial statement are derived or reveal other important financial information not shown in the three basic statements.


Avoiding generally traded companies on perceived social harm--or selecting on perceived benefit.

Secondary Capital

Subordinated and uninsured investments in community development credit unions (CDCUs). The term of the investment must be five years or more. Investments are held in, and interest accumulated in, a designated secondary capital deposit account. In the event of operating losses that exceed available reserves and undivided earnings, funds in the secondary capital account can be used to cover the losses. Viewed as capital by regulators, secondary capital functions similarly to EQ2 (described above), boosting a CDCU's ability to take on new deposits and increase lending without jeopardizing safety and soundness. However, as there is a cost to the funds, and as the proportion of the investment that is considered capital depreciates in equal increments over time, secondary capital is best used as a bridge for growth, not as a means of permanent sustainability.

Secured Loan

A loan in which the borrower pledges an asset (such as property) as collateral. If the borrower defaults, the lender takes possession of the asset used as collateral and has the optional remedy to sell it to regain some or the entire amount originally loaned to the borrower.


A pledge of assets to assure the performance of an obligation or the repayment of a debt. Security on a loan can include real estate, personal property, stocks, and mortgages.

Security and Exchange Commission (SEC)

The Securities and Exchange Commission (SEC) is a U.S. government agency that oversees securities transactions, activities of financial professionals and mutual fund trading to prevent fraud and intentional deception. 

Self-Sufficiency Ratio

The ratio of earned income to total operating expenses. A CDFI with a self-sufficiency ratio of less than 1.0 is not covering its costs with income from its own activities and requires operational subsidy.

Shareholder Activism

Voting proxies and engaging management of generally traded companies to change corporate behavior.

Side Letter

An agreement that is not part of the core documents in a deal. Sets out terms that supplement or sometimes modify the terms of existing agreements; often grants special rights or privileges to important investors. A side letter is often used in the context of equity PRIs to include necessary language to qualify the investment as a PRI and to allow the foundation to exercise expenditure responsibility over the investment. 

Have a question, website feedback, or idea to make our services better?



Please contact [email protected] if you have trouble logging in.