In This Section
Effective Date 
An effective date or as of date is the date upon which something is considered to take effect, which may be a past, present or future date. This may be different from the date upon which the event occurs or is recorded.
Effective Advance Rate
A fraction (i) the numerator of which is equal to the outstanding loan balance against a particular category of collateral and (ii) the denominator of which is the gross amount of collateral in that category.
Economic Obsolescence
Defined as a form of depreciation, or an incurable loss in value, caused by unfavorable conditions external to the property itself, such as the local economy, economics of the industry, availability of financing, encroachment of objectionable enterprises, loss of material and labor sources, lack of efficient transportation, shifting of business centers, passage of new legislation, and changes in ordinances.
EBITDA Adjusted
EBITDA Adjusted represents EBITDA plus any negotiated add-backs or non-cash items not included in the standard definition of EBITDA.
EBITDA Add-Backs
EBITDA add-backs are amounts for specific expenditures that the borrower adds to EBITDA to come to Adjusted EBITDA.
EBITDA
A company's earnings before interest, taxes, depreciation, and amortization, is an accounting measure calculated using a company's net earnings, before interest expenses, taxes, depreciation and amortization are subtracted, as a proxy for a company's current operating profitability.
Due Diligence
Reasonable steps taken by a company in order to satisfy a legal requirement, especially in buying or selling something.
Due Date Aging
An aging schedule often categorizes accounts as current (under 30 days), 1-30 days past due, 30-60 days past due, 60-90 days past due, and more than 90 days past due.
Drop Shipment
Drop shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer.
Downside
The negative movement in the price of a security, sector or market. Downside can also refer to economic conditions and it describes periods when an economy has either stopped growing or is shrinking.
Double-Sided Posting
Double-Sided Posting refers to when the incoming cash is applied to both the loan side and collateral side. This is also known as "Gross & Net" posting. In a traditional ABL revolving line of credit, the incoming cash would reduce the receivable and revolver balance simultaneously.
Documentary Letter of Credit
A Documentary Letter of Credit is a written obligation of a bank, issued at a client's request, to pay a certain sum after the fulfillment of the conditions stipulated in the letter of credit. The banks involved examine only the documents, not goods or services.
Dividend Recapitalization
A Dividend Recapitalization, also referred to as a dividend recap, occurs when a company incurs new debt in order to pay a special dividend to shareholders.
Discount Rate
The Discount Rate is the interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window.
Direct Ship
Direct Ship or Direct Shipment is a method of delivering goods from the supplier or the product owner to the customer directly. In most cases, the customer orders the goods from the product owner. This delivery scheme reduces transportation and storage costs, but requires additional planning and administration.
DIP Financing Order
A DIP Financing Order is the agreement which governs the terms of the DIP Financing and must be approved by the bankruptcy court. See DIP Financing definition for further details.
DIP Financing
Debtor-in-Possession financing (DIP financing) is financing made available to a company during the Chapter 11 bankruptcy process, generally for the purpose of restructuring. The Debtor-in-Possession must file a motion seeking approval of the DIP financing with the Bankruptcy Court.
Dilution Reserve
A reserve established by the Creditor from time to time to reduce availability under the Borrowing Base to reflect a reduction in the advance rates applicable to Eligible Accounts Receivables.
Dilution
In the commercial finance world, dilution or A/R dilution refers to non-cash reductions to the A/R balance. Dilutive items, such as discounts, credit memos, and write-offs, dilute the value of accounts receivable, as they represent billed amounts that are not ultimately collected.
Detailed A/R Aging
A detailed accounts receivable (A/R) aging is a report that lists unpaid customer invoices (by individual invoice) and unused credit memos by date ranges. The aging report is the primary tool used by collections personnel to determine which invoices are overdue for payment.
