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Glossary of Terms

Set out below is a Glossary of standard transactional terminology for private equity and corporate finance transactions. Use the filter menu if you are looking for a specific term, or to navigate the Glossary alphabetically.

Asset saleThe sale of the company's assets rather than a purchase of shares.

Capital gainThe profit remaining when an asset is sold for more than its original purchase price. Capital gains are subject to tax so the investor will not necessarily receive the total profit made. A capital loss is when the asset is sold for less than its original purchase price.

Debt financingThe use of borrowed money to finance a business. Different forms of debt can be used to raise money for working capital or capital expenditure such as overdrafts, bank loans, lease financing, commercial mortgage, invoice finance, asset finance or bonds. The loan can be secured or unsecured, short or long-term. The lender receives interest at an agreed rate and if the loan is not repaid may be entitled to take control of or sell assets which are owned by the company.

Net asset valueThe value of the company based on the assets less any liabilities it has on its balance sheet.