What is an Equipment Lease Agreement? An equipment lease agreement is a contractual agreement where the lessor, who is the owner of the equipment, allows the lessee to use the equipment for a specified period in exchange for periodic payments. The subject of the lease may be vehicles, factory machines, or any other equipment. Once…
What is Social Security? Social Security is a US federal government program that provides social insurance and benefits to people with inadequate or no income, or who are retired from the workforce. The original Social Security Act was signed into law in 1935 by President Franklin D. Roosevelt. The law has undergone several modifications over…
What is a Fee Tail? A Fee Tail is a provision that is included in an engagement letter relating to the termination of an investment banker’s engagement in a sale transaction. The services of the investment banker handling the transaction may be terminated before closing the deal, and the fee tail provision offers guidance on…
What is Knocking on Doors? Knocking on Doors is a lead generation strategy used by investment banking advisors looking to secure prospects for business while keeping expenses at a minimum. The strategy started in the early 20th century when insurance agents would go knocking on people’s doors. There were no fax machines, mobile phones, or…
What is a QLAC? A Qualified Longevity Annuity Contract (QLAC) is a special type of Deferred Income Annuity that comes with tax-deferred savings and is funded from a qualified retirement account or IRA. It is also known as a deferred income annuity, as it lets you defer payments so that you can benefit more in…
What is Non-Assessable Stock? Non-assessable stock is a class of stock ownership where the stock owner is limited in their liability to the amount paid for the stock. It means that in the instance of bankruptcy or a lawsuit, the shareholders cannot be found liable for any financial or legal troubles endured by the company…
What is a No-Load Fund? A no-load fund is a type of mutual fund where shares are bought and sold without commission charges for the purchase or the sale being taken out of the investor’s funds. The sales charges are called the “load,” and no-load mutual funds, as the name would imply, offer investors a…
What is a Mortgage Forbearance Agreement? A mortgage forbearance agreement is made when a bank or other mortgage lender agrees to temporarily either forego a borrower’s mortgage payments or reduce them. Lenders are open to making such agreements during times of economic crisis, such as the Global Financial Crisis of 2008 or the COVID-19 pandemic…
What is Next-In First-Out (NIFO)? Next-In First-Out (NIFO) is a method of inventory valuation used for internal purposes. NIFO involves charging the cost of goods sold by the replacement cost of the item sold from inventory. The value of NIFO inventory valuation method is derived from its ability to integrate the effect of inflation into…
What is Net Interest Margin? Financial intermediaries in the economy deal extensively with borrowing and lending, and the net interest margin is the net benefit of lending. Net interest margin is the difference between the interest income generated and the amount of interest paid out to lenders. It is an industry-specific profitability ratio for banks…
