In This Section
Prime Rate 
The prime rate is the interest rate that commercial banks charge their most credit-worthy customers.
Pre-Petition Loan
A Pre-Petition Loan as well as other pre-petition debt, is debt the Company incurred before filing for bankruptcy. It is important to classify debt as pre-petition or post-petition to understand which debts are covered under bankruptcy protection.
Prepayment Fee
An agreed-upon amount paid to the lender if the borrower pays all or a portion of its loan prior to the contract maturity. If there is a prepayment fee, it typically is highest in Year 1 and steps down in following years.
Prepaid Expense
A Prepaid Expense is an asset on the Balance Sheet as a result of a company making payments on goods/services to be received in the near future.
Preferential Transfer (Preference)
A Preferential Transfer, also known as a Preference, is a transfer from the debtor to the creditor before a bankruptcy filing (and during the Preference Period) to the exclusion or detriment of other creditors.
Preference Period
In bankruptcy or Chapter 11, there is a 90 day period prior to the bankruptcy filing known as the "preference period". With few exceptions, a security interest obtained or perfected within this period is void and any payments received by a creditor during the preference period must be returned to the debtor.
Prebilling
Prebilling happens when goods are invoiced without being shipped. In this case, there is no clear title transfer, and therefore should be considered ineligible since title must pass for items to become receivables.
Post-Petition Loan
A Post-Petition Loan is one that is made after a company files for Bankruptcy. Post-petition borrowings are governed by section 364 of the Bankruptcy Code.
Pledge
A delivery of assets to a creditor as security for some debt or any other obligation. May include a written agreement and recurring reports such as Borrowing Base Forms.
Plan of Reorganization
In Chapter 11 bankruptcy, a plan that outlines how a debtor will pay back creditors over time. In order to move forward with a plan of reorganization, it must be accepted by creditors and confirmed by the court.
Personal Property
Tangible objects that are owned and considered by the general public as being “personal.” All tangible property that is not classified as real estate.
Personal Guaranty
An agreement that makes an individual legally obligated to repay an associated debt. The associated debt is the loan made to the business the Guarantor is related to
Perpetual Inventory
A Perpetual Inventory is an inventory tracking system where information on inventory quantity and availability is updated on a continuous basis as a function of doing business.
Permitted Liens
Rights to keep possession of property belonging to another person until a debt owed by that person is discharged.
Permitted Investment
Investments allowed in other parties under a current contract or agreement.
Permitted Disposition
Any sale of an asset allowed under a current contract or agreement.
Permitted Discretion
A determination made in the exercise of reasonable business judgment. Typically outlined in a contract or agreement.
Permitted Debt
Level or source of new debt allowed under a current contract or agreement.
Permitted Acquisition
A clause in a contract that permits any future acquisitions given a set of criteria to be met.
Perfected Security Interest
A lien against an asset that is registered with the appropriate statutory authority so that it is made legally enforceable and protected from claims by other parties and any subsequent claim on that asset is given a junior status.