In This Section
Desktop Appraisal 
The Desktop Appraisal is a valuation performed without a physical inspection of the property or assets. The methods for valuation remain the same, however there are no on-site visits. Desktop appraisals will be more cost effective than a standard appraisal.
Depreciation
Depreciation is a reduction in the value of an asset with the passage of time, due in particular to wear and tear. In terms of accounting, Depreciation is a method of allocating the cost of a tangible asset over its useful life.
Deposit Account Control Agreement (DACA)
An agreement between the borrower, secured party, and bank which enables the secured party to have a security interest in the deposit account. You will most often see these agreements when a borrower is transitioning from one lender/bank to another.
Deposit Account
A Deposit Account is a savings account, current account, or any other type of bank account that allows money to be deposited and withdrawn by the account holder.
Demurrage
Demurrage refers to the charges that the charterer pays to the ship owner for its delayed operations of loading/unloading. Officially, demurrage is a form of liquidated damages for breaching the laytime as a it is stated in the governing contract (the charter party).
Default Letter
A formal letter sent by Creditors to inform the Borrower of a default before taking supplemental action.
Default
Failure to fulfill an obligation that was laid out in the credit agreement. A default may result in penalties being applied or the loan being called.
Debtor-In-Possession (DIP)
A Debtor-In-Possession (DIP) is an individual or corporation that has filed for a Chapter 11 bankruptcy case, while still maintaining the power to operate the business and have control over the property that a creditor has a lien against.
Debt Tranches
A portion of debt within the capital structure of a company. Common tranches are senior debt, mezzanine debt and subordinated debt.
Debt Service
Debt service Includes Principal and Interest payments. It's part of the calculation of a borrower's Debt Service Ratio which gauges the client's ability to pay its interest and principal payments.
Debit Memo
Debit memos are positive adjustments to an accounts receivable balance that are not the result of traditional sales.
Days Past Due
Amount of days past the due date of the invoice.
Customs Broker
Broker who facilitates "clearing" of goods through customs for importers and exporters. Brokers may hold ownership/offset rights on the collateral for expenses incurred in clearing the goods thru customs.
Customized Inventory
Inventory that is customized in nature and potentially not easily liquidated as it is highly specific to the account debtor. Typically inventory of this nature has either a low advance rate or is considered ineligible.
Current Ratio
The Current Ratio measures ability to service obligations due in 12 months with current assets.
Cross-Guaranteed
An agreement in which two or more entities guarantee each others liabilities. An example would be when the Parent Company guarantee's the Subsidiary's liability and the Subsidiary guarantees the Parent Company's liability.
Cross-Defaulted
A provision in a credit agreement that places the borrower in default if they are in default on another credit agreement.
Cross-Collateralized
Cross-Collateralization occurs when the collateral defined in one credit facility is also the collateral of another facility.
Cross-Age
Past due accounts receivable exceeding a certain percentage threshold of total accounts receivable. If the threshold is met, the entire amount of accounts receivable is considered ineligible.
Credits in Prior
Credits that appear in the past due/over eligible day section of the accounts receivable aging. These amounts are reserved as the present a potential offset to debit balances less than past due.
