Glossary terms

A United States individual has a net worth of assets exceeding $1 million which excludes the value of their primary residence. Full description here.

Active income is sometimes known as a form of set salary which an employee receives monthly or bi-weekly for completing a specific job or upfront work.

An offering that is allocated to an investor comprises a certain percentage of the total offering vehicle, based on investment amount and split pro-rata. Read more about it here.

Amortization refers to both the principal and interest payments made throughout the loan repayment plan. Amortization is used for various types of loans.

The fiscal value increase of a set asset over time is influenced by interest rates, inflation, a decrease in market demand, or an increase in demand.

Division of product offerings by an investment firm i.e. YieldStreet enables investors to easily navigate offerings that suit their individual preferences. Here you can learn more.

Asset-based investment, sometimes referred to as asset-based financing, is a form of investment that collateralizes company securities to obtain a loan. Find out more.

A financial unit of measurement is usually equal to 1/100th of 1%. Basis point or BPS can be used to measure interest rates or yield on specific securities.

Capital gains taxes are paid on the sale or profits made on a set asset or investment. Capital gains taxes apply to income received on rentals, dividends, or yield from an investment.

A calculation is used to help determine the potential Rate of Return (RoR) on a real estate investment.

Carried interest acts as the basic compensation for a fund manager. It’s a share of the profits from the investment that is paid to the investment manager. Carried interest explained in full here.

Loans in which the borrower will offer assets as collateral to secure the loan. If the borrower defaults the lender will have ownership of those assets. Find out more about collateral here.

Common equity includes the value of shares of common stock, earnings and paid-in capital, and the number of investments in a company made by investors.

The accumulated interest of a loan or deposit for previous periods and on principal payments made. It’s also simply known as “interest on interest.” We expand here.

A legal written agreement is signed by the lender, agreeing to repay any money owed to the creditor (borrower) to avoid court action to resolve disputes. Learn more about it here.

When a plaintiff is represented on a contingency fee basis, no legal fees are paid until they have won their case, the lawyer receives a percentage thereof. Broader description available here.

A mutual relationship between two different investments that have a similar response to market influence and market-related forces. A full description here.

The price paid for a security, reinvestment amounts of dividends, capital gains distribution, or other costs, fees, and commissions in the transaction.

Cost of capital refers to the minimum rate of return a business or company has to generate before a new purchase, or investment starts to make money. Find out more.

An indenture that is entered by a borrowing party or individual to proclaim which activities may or may not be carried out, these include certain agreements. Here you can learn more.

Money owed on financial instruments that were borrowed from a financial lender or institution. The borrower is required to repay the debt or return the value thereof.

When a borrower is unable to make repayments on their loan according to previously agreed-upon terms and conditions, known as being “in default.” Default explained here.

Payments made by any private or public fund to investors. Companies use disbursements to complete the final payment on any form of goods and expenses. Examples available here.

Dividend Reinvestment Plan is a scheme through which investors reinvest their earnings or dividends back into stocks of the company.

The remaining value of an asset after the deduction of all liabilities, there two types, tangible and intangible assets.

Free cash flow is the amount of cash available after a company has paid its operations and other capital expenditure.

Typically known as an HNWI, this individual has financial assets, excluding primary residence that exceeds the $1 million and does not surpass $5 million. HNWI described in full.

The method used to evaluate the attractiveness of an investment opportunity. The IRR presents cash flows equal to zero. Learn more here.

All tangible goods are housed by a business with the intent of it being sold as part of business operations, for example, food, clothing, car parts, etc. A full description here.

Asset-backed lending makes use of company inventory as a form of collateral to help secure a loan. Inventory can be seized when borrowers default. Full description available.

The investment memorandum acts as a profile considering all investments to determine whether the offerings will meet the client’s desired needs. Example of investment memorandum included here.

A property or real estate that is held by an investor for the practice of retaining capital income or appreciation from it.

Known as a letter of direction gives the recipient-specific rights regarding the sender or writer’s finances, written to a bank or family members. LOD explained better here.

The JOBS Act was a bipartisan project led by Obama and Congress to leverage the use of crowdfunding, democratizing access to capital for both large and small businesses.

A legal action in which a lender seizes the property of the borrower that’s failed to make payments on a loan. Property is held until repayments are made. A broader description is available below.

A linear income can be a job where you need to either clock in for every shift or be present in-office to physically receive your wages or income.

The rate at which assets owned by an individual or company can easily be sold off for cash. These can include publicly traded stock or Treasury Bills. Learn more about liquidity here.

Liquidity premium refers to a type of investment that cannot be sold at a fair market value, where investors require additional security on the available asset.

Determines the amount of debt relative to the cost of purchasing a property in commercial mortgage financing and multifamily financing.

Used to calculate and evaluate collateral. This refers to the loan amount and the underlying assets which determine the cushion the borrower has. Here is a full LTV description.

The civil action of numerous plaintiffs against selected or multiple corporate defendants. These civil grievances are resolved in state or federal courts. Mass Tort fully explained here.

Multiple on Invested Capital (MOIC) is a performance metric commonly used with private market investments. It measures the value of your investment at maturity relative to the amount you initially invested. Simply put, MOIC is how many times you get your capital back on an investment. 

For example, consider an offering with a MOIC of 1.8X. Should you invest $100K in this offering, you can expect to receive $180K at maturity. 

NAV is used to determine the market value of the mutual fund. This instrument is used to estimate whether a fund is under or overvalued.

A calculation used in rental property by the investor or property buyer to determine the potential profitability of their property investment purchase.

The lender pledges a form of collateral, i.e. real estate or property, for which the borrower is not personally liable. More details are available here.

Fixed income terms are often used interchangeably, despite referring to different financial concepts. Interpreting these terms correctly can help investors calculate potential return and better value their income opportunities.

Fixed income terms are often used interchangeably, despite referring to different financial concepts. Interpreting these terms correctly can help investors calculate potential return and better value their income opportunities.

Bylaws described in an operating agreement, members and investors agree to operate the newly formed SPV. These apply to Yieldstreet offerings. Learn what to include.

Originators assist with determining the terms of the loan with the borrower, performing due diligence. The originator acts as the liaison for the borrower.

Find out more.

An originator that sells parts of a loan to individuals, businesses, and financial investment firms. Participation can be 100% or as little as 5%. Learn about this concept.

An agreement was signed by the originator and investors. With YieldStreet, managers of the SPV sign the agreement as a proxy to purchase a loan percentage. See a more detailed description here.

The frequency represents how often investors should receive forms of principal or interest repayments on their investments. Here you can find out more.

An individual or group which begins a new case in the court of law against a defendant, both parties are represented by an attorney or lawyer. The definition is expanded here.

Funding is allocated to a plaintiff before any compensation from the settlement of the case can be accessed or received by the plaintiff. Description expanded.

Non-recourse funding plaintiffs receive while awaiting to start or resume the trial. This funding is allocated for personal use and legal fees. Explained in full.

Gives preference to a class of equity above a common preferred class concerning the overall distribution of profits among shareholders.

A manageable investment scheme controlled by an investment broker or a limited liability partnership houses a collection of equities and debt securities.

A Latin phrase that describes a proportionate allocation of a certain amount. This will include a fraction amount according to its share of the whole. Pro-Rata explained.

Earnings that a person receives on investment or asset that continuously pays profits without the investor having to put in additional work.

Allows companies, startups, and entrepreneurs to raise funding capital from the entire public which includes both accredited and non-accredited investors.

An exemption within the Securities Act of 1933 allows investors and companies to qualify for exemptions under the registration requirements.

Residual income is earned by completing upfront work, and receiving a salary or set wage and is the amount of money left after covering expenses and taxes.

A secured position allows one to secure a loan using collateral, whereas an unsecured one does not require upfront collateral beforehand.

Debt takes priority over other forms of equities and debts if a company or investor defaults on their loan repayments.

A portion or part of the debt is paid off first secured with collateral. Normally offered by corporations, Limited Liability Companies or a Limited Partnership. More on this topic.

The order in which a company is required to pay off debt is usually above junior debt, applicable to companies who are operational or who have filed for bankruptcy. We expand here.

An agreement or resolution between two or more disputing parties about a legal matter. Settlement is agreed upon before the commencement of a court case. Topic expanded here.

A company can form an SPV, a separate entity from the primary company which is used to secure and privatize any form of company investment. Examples of SPV.

A tax loophole for investors and corporations to help bypass capital gains taxes for assets that are passed on.

An agreement signed by all investors looking to purchase a portion of a Special Purpose Vehicle. Each investor will have pro-rata ownership of the SPV. See more here.

A legal financing statement filed by a creditor allows them to give notice that it has or may have an interest in the personal property of a debtor. Examples available here.

An underwriter performs a background check on a borrower to determine whether the person can repay the loan and if they can offer collateral.

Capital income is received from an investment, either being stocks or shares. Higher-yielding stocks are more lucrative and sometimes the most preferred option on the market.