Difference Between Lien and Mortgage

Lien vs Mortgage   Companies frequently borrow funds for investment, expansion, business development and operational requirements. In order for banks and financial institutions to grant funds to borrowers, there needs to be some form of assurance that the borrowed funds will be repaid to the lender. This assurance is obtained when borrowers offer an asset […]

Difference Between Lien and Levy

Lien vs Levy   Any individual, firm, corporation, or legal entity will have to make a payment to their country’s government known as a tax payment. The funds that are collected through tax is the largest income that the government receives and is used for the running of government, investment, development, infrastructure, healthcare, public safety, […]

Difference Between Future and Swap

Futures vs Swaps    Derivatives are financial instruments whose value depends on the value of an underlying asset or the value of an index. Derivatives are used for a number of purposes which include risk management, hedging, speculation, portfolio management, and for arbitrage opportunities. Two such commonly discussed derivatives are swaps and futures. Swaps and […]

Difference Between Cost of Capital and Cost of Equity

Cost of Capital vs Cost of Equity   Companies require capital to start up and run business operations. Capital maybe obtained using many methods such as issuing shares, bonds, loans, owner’s contributions, etc. Cost of capital refers to the cost incurred in obtaining either equity capital (the cost incurred in issuing shares) or debt capital […]

Difference Between Lien and Pledge

Lien vs Pledge   Companies frequently borrow funds for investment, expansion, business development and operational requirements. In order for banks and financial institutions to grant funds to borrowers, there needs to be some form of assurance that the borrowed funds will be repaid to the lender. This assurance is obtained when borrowers offer an asset […]

Difference Between Letter of Credit and Documentary Credit

Letter of Credit vs Documentary Credit   There are a number of payment mechanisms that are used when conducting international business. Letter of credit is a prominent payment method used, particularly for import and export activities. There are a few types of letters of credit which include documentary credit and standby letters of credit. The […]

Difference Between Liability and Equity

Liability vs Equity   At the year end, organizations prepare financial statements that represent their activity for the specific period. One such statement that is prepared is the balance sheet that includes a number of items such as assets, liabilities, equity, drawings, etc. The following article discusses two such balance sheet items; equity and liabilities, […]

Difference Between Fixed and Floating Charge

Fixed vs Floating Charge   Fixed and floating charges are mechanisms used to provide a lender with security over a borrower’s assets. The main difference between the two lies in the types of assets held as collateral and the flexibility in disposing the asset over the life of the loan. The type of charge chosen […]