Description of terminologies pertaining to equity finance

Equity finance in nutshell is defined as finance incurrence by a company from a lender by selling off few stocks to the lender. This gives the lender a grasp in the company. Once the corporation starts gaining revenues, the proprietor can procure back the stocks to achieve 100 percent control.

Although the explanation of equity finance appears incredibly uncomplicated but the actions associated with it are a complete contrast. Here we are considering few key terminologies crucial for procurement of equity finance:
Financial analyst: a person employed by the broker firm to establish the credential of a company for advising the investors as to whether they need to buy of sell the stocks of the concerned corporation.

Accredited investor: Also referred to as angel, they are private investors or group who invest their finances into establishments at various stages of maturity. These investors should convene the income requirements and net worth of Securities and Exchange Commission. They are usually operated by investing in one company and then syndicating the rest of the finance with other private investors for further speculation.
Affiliated person: Also known as, an insider is a shareholder or director of a firm with 5% share of the public during the issue of it. They have all the right to protect the interest of the public shareholders. They are intermediately body between a corporation and the public.
Annual shareholder report: The company prepares an authorized report of the board members, management, facilities, corporate vision, operations and audited financial statement. This report is essentially distributed among the registered as well as unregistered shareholders.

Annual shareholder meeting: It is an essential step to be incorporated by companies. Every year companies send invitations to the shareholders through annual shareholders reports. The meeting is largely conducted to resolve issues put across by the shareholders. It is fundamentally convened for election of board members, officer’s compensations and for discussing the corporate vision and plans of the company.

Authorized shares: It is in regards to the quantity of shares that shareholders aggress upon. That would be the maximum share issued by the company to that particular shareholder and the amount of shares can diverge from a million to 100 million.

Bear market: is the circumstances faced by us in the current scenario i.e. recession. The downfall and decline of share market pertaining to failing economy of the state leads to fear of shutdown of individual companies. Hence, the companies share rates slope down drastically.
Broker dealer: this is in reference to an authorized member of National Association of Securities Dealer i.e. NASD. The members of NASD operate within NASD bulletin board, over the counter and NASDAQ trading system.
Business plan: a written plan exhibiting further growth pattern being considered by the corporation. A convincing business plan should also include present achievements.

Convertible Debenture: Also prophesized as equity related loans; these usually are loans collateralized with equity position or loans convertible to equity ownership.

The terminologies related are endless and each is relevant for the knowledge of loan applicants.