Commercial Glossary: P

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Partial: Any incomplete payment or deficient payment in a payment stream.

Partners: The individuals in a legal business partnership.

Partnership (General): This is involves 2 or more individuals in the partnership.

Partnership (limited): Legal partnership where one partner is limited has limited liability to only the money invested and another partner has liability that extends beyond just monetary contribution.

Payee: The individual or company who has the right to receive payments from an income stream.

Payment Schedule: Schedule of when payments are due.

Payor: This is the individual or entity obligated to make payments to a payee.

Perfected First Security Interest: This is a status applied to securities after certain conditions are met which grants where under there are no other liens prior to it.

Personal Financial Statement (PFS): A showing of ones assets and liabilities on a balance sheet that shows personal net worth.

Personal Guaranty: This is where a business or company owner obliges to personally pay for debts and assume liabilities if the business defaults.

Principle, Interest, Taxes, Insurance (PITI): These 4 elements are the primary components of a mortgage payment.

Points: 1% of the loan amount is equal to 1 point. Points are charged by the lender to increase the yield of the loan.

Portfolio: Collections of loans, mortgages, securities and income streams bundled by type.

Pre-Approval: When applicants or home-buyers are approved for certain limits and terms even before having selected a house.

Pre-Payment Penalty: A fee charged by lenders on loans that have a prepayment penalty for early loan or mortgage payoff.

Prequalification: See pre-approval. Qualifies a home-buyer for a certain limit and terms even before a house has been selected.

Principal: This is the amount of the loan amount that is unpaid. The principal does not include interest; it is only the balance of the unpaid loan amount.

Principle Balance: This is the remaining unpaid balance of a mortgage or loan.

Privately Held: A cash or income stream held by an individual who receives the payments instead of a business or company.
Private Mortgage Insurance (PMI): Insurance required for non-federally insured mortgages that covers the lender from losing money in the event of borrower default.

Profit and Loss Statement: Financial statement of earnings minus expenses resulting in either a profit or loss for the company.

Projections: Estimated forward looking view of a businesses operations and workings.

Proforma Financial Statement: Similar to making projections, proforma financial statements are forward looking views and estimates of a companies performance.

Promissory Note: This is the loan agreement between a borrower and a lender that the borrower will repay the debt under set terms and interest.

Proposal: This is an offer written by an account executive that specifies the terms and conditions of a transaction offer.

Purchase and Sale Agreement: This is an agreement between a buyer and a seller that specifies the terms and conditions of the sale.

Purchase Order (PO): Authorization for purchased from a supplier or vender with a specified quantity and price.

Purpose: Borrowers intentions for funds received from a lender.

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