Accountability – being answerable to the enterprise’s members, funders, statutory bodies, regulators, community, general public, etc.
Bridging loan – a loan taken for a short period to deal with a temporary cash flow problem, or pending the receipt of funds (e.g. sale proceeds, retrospective grant payment).
Capital – money used in a business to generate income. Can be in the form of loans/overdrafts, grants or equity (investment in business).
Capital Moratorium – also knows as a repayment holiday – a period where repayment of the capital is deferred, usually at the start of the loan. Repayments are generally ‘interest only’ during this period.
Cashflow projections – a forecast of all the money coming into and being paid out by an organisation, month by month, over a period of time.
Charity – a body of persons or a trust which exists to help those in need or provide educational, scientific, religious and artistic assistance to members of the public.
Community Development Financial Institution (CDFI) – a financial service provider (possibly a community based bank, community loan fund or a community development venture fund) which has a mission to achieve social objectives.
Company Limited by Guarantee – a company in which, instead of buying shares, each member signs a guarantee to provide a pre-determined amount, which may be as low as £1, if needed when the company is wound-up. Social enterprises, charities, development trusts, social firms and community businesses frequently use this form of incorporation.
Co-operative – an enterprise that is owned and controlled by the customers who use the service. The economic benefits of a co-operative are given back to the members, reinvested in the co-op or used to provide member services
Financial systems – a set of procedures which formalise the rules for the management and control of an organisation’s finances.
Fixed assets – assets held by an organisation for the long-term for use in achieving its objectives, and running the organisation e.g. buildings; equipment; furniture and fittings; computer and office equipment; motor vehicles.
Fixed overheads – running costs that do not change with activity levels. These are incurred even if there are no projects or activity e.g. rent, rates, heat and light, accountancy fees, governance costs.
Micro-enterprise – a very small business, usually defined as having fewer than 10 staff, but sometimes fewer than 5 staff (89% of all UK businesses have fewer than 5 employees).
Non-profit, Not-for-profit, More-than-profit – terms commonly used to describe organisations which do not distribute profits, although they seek to make an operating surplus.
Social audits – social and ethical accounting and auditing are all methods of measuring and reporting to stakeholders on an organisation’s social and ethical performance.
Social entrepreneur – an entrepreneur has imagination to identify new opportunities and determination to bring them to fruition. A social entrepreneur does so for public good rather than private profit.
Stakeholder – Somebody or something with direct interest: a person or group with a direct interest, involvement or investment in something.
Term loan – a loan that has to be repaid over a set time period, usually in regular instalments.
Trustee – Person or institution that oversees and manages a trust.
Working capital – the amount of cash in the bank necessary to ensure that salaries and bills can be paid as they fall due.
This article is from the Prowess archive 2003-2008