A balance sheet is basically a financial statement listing the nature and amount of a company’s assets, liabilities and equity at any given time. Every type of business requires the preparation off a balance sheet; therefore it is important to know the most important terms referred to in a balance sheet.

Assets and liabilities refer to the items that belong to the company and those that are likely to incur the company expenses. There are also non-current assets which are those assets bought with the intention of remaining in use over a long period of time. Capital is usually the company shares; either preference or ordinary, while reserves are profits made by the business but have not been shared among shareholders.
Other common terms are income and expenses where income is any money coming into the company, while expenses are the total amount that the company spends in their daily routine of operations.

Federal rates are the rates charged when one bank loans another are mostly short term. Thus the federal funds are the amounts lend out other depository institutions or banks.

Federal rates influence the interest rates by—

Whenever any change occurs on the federal funds, the most infected are the short term interest rates including home equity and adjustable rates which results in

fluctuation in the inflation rates. The inflation causes an increase in the long term interest rates.

Interest rates are mostly influenced by demand and supply. When the supply is short of the demand the interest rates rises. Each bank is required to keep a reserve amount with the central bank (federal rates/funds). These help in curbing the demand and supply of money

An increase or decrease in interbank lending and borrowing capacity is affected by the rates. When the inter bank rates increase the interest rates for the loans increase and vise versa.

Commercial mortgages are considered as the best way to finance the acquisition of land and buildings for business purposes as they provide easy finance and are secured on commercial property.

Commercial mortgages comes in two categories, the owner occupier commercial mortgage( purchase for personal use) and the Commercial investment mortgage( purchase for rental) These loans are different from others for they involve huge sums of money and you must state the preference before availing a loan and the time for repaying the loan should be made clear.

This type of loans are risky for lenders as they pose a risk to them and qualifying for this kind of mortgage is difficult and borrowers need to furnish numerous documents to get this kind of loans. On successfully fulfilling certain criteria, a borrower qualifies for full financing and purchase of commercial real estate or any property of his or her choice