Trade finance glossary
At Diaspora, we believe in keeping things simple so you can get on with doing business. We explain our products in simple language, with no small print. The world of financial services is full of jargon and obscure acronyms. We’re here to clear up any confusion so you can be fully equipped to find the right solution for your business.
This is the money that is owed to suppliers for services or goods provided by them. This will often be in the form of an invoice and will be a current liability on your balance sheet. The people that you owe money or services to are also known as creditors. Accounts receivable This is the money that is owed to you for the services or goods you have provided to customers on credit. As the customer is legally obliged to make the payment, this is usually recorded as an asset. These customers are also commonly known as debtors.
AML stands for anti-money laundering. These are systems and controls put in place by regulated firms to prevent, detect and report money laundering.
An area of computer science that is able to perform tasks that ordinarily require human intelligence and reaction.
Assets are anything owned by your company that holds a financial value, such as cash, property or equipment.
A decentralised, digital ledger that is used to securely record transactions across many computers.
This is another name for the assets or wealth a business owns and could be in the form of property or money.
CTF stands for counter-terrorism financing. These are systems and controls that regulated firms are required to put in place in order to prevent, detect and report the financing of terrorism.
A form of financing where a financier loans a business a lump sum based on the value of its unpaid invoices but the business retains full responsibility for chasing debt and processing invoice payments.
A form of financing where businesses sell their sales invoices to a third party in exchange for a pre-agreed lump sum which they can draw upon to finance their growth plans or to improve cash flow. The third party is usually responsible for chasing debt and processing invoice payments.
KYC stands for know your customer. This is the due diligence that regulated financial institutions carry out to identify their clients to prevent identity theft, fraud, money laundering and terrorist financing.
This is the name given to any debt or financial obligation.
An area of computer science that uses statistical techniques to give computer systems the ability to learn by example from historical data to predict outcomes and uncover patterns that are not easily spotted by humans.
Onboarding involves the processes and procedures involved in registering a customer with a financial institution. This usually includes customer identification, the completion of KYC and AML checks, and agreement on terms of businesses.
Peer-to-peer (P2P) lending
A type of lending which allows businesses to bypass traditional bank loans by linking directly with investors and lenders, usually via a platform.
This is a term used to describe the amount of capital available to a business at any one time. It is calculated by deducting any current liabilities from the company’s assets.
When an investment is made, the yield is the income returned on that investment.