Credit to Cash Glossary: Key Terms Every Business Owner Should Know

If you’re running a business and looking for fast, flexible funding options, the jargon can get overwhelming—fast. Terms like credit utilization, working capital, and credit stacking are everywhere… but what do they really mean?

At MFC, we help business owners turn their available credit into usable capital through a smart, compliant strategy called credit conversion (credit liquidation). This glossary breaks down the key terms you’ll see in this space so you can make confident, informed decisions—without needing a finance degree.

Business Credit

A credit profile tied to your business (not you personally) that allows you to access funding, credit cards, and lines of credit. A strong business credit score can unlock higher limits and better terms.

Working Capital

The cash available for day-to-day operations. When business owners convert credit into cash, it often goes straight to supporting working capital—like payroll, inventory, or rent.

Credit Conversion (Credit Liquidation)

A funding strategy where your available credit is transformed into liquid capital without taking out a loan or incurring cash advance fees. This is also known as credit liquidation, and it’s MFC’s core service. Our process is fast, compliant, and designed for business owners who need cash flow quickly—without the risks of traditional financing or merchant cash advances.

Credit Utilization

The percentage of your credit limit that you’re currently using. Lower utilization = stronger credit health. Strategic credit conversion can help reduce or manage this.

Credit Stacking

Using multiple business credit lines or cards across different institutions to access more capital. MFC helps clients stack credit smartly and avoid high-risk overlaps.

Merchant Cash Advance (MCA)

A high-risk, high-fee financing option based on future revenue. MCAs can quickly lead to debt cycles—we offer safer alternatives through credit conversion.

Business Line of Credit

A revolving credit option that allows businesses to draw, repay, and reuse funds. Often paired with strategic funding tactics like credit stacking.

Personal Guarantee (PG)

A personal commitment to repay business debt. Some credit lines require a PG—MFC can help navigate funding options with or without one.

UCC Filing

A public notice of a lender’s legal interest in your assets. Many business funding sources file a UCC, which can impact your ability to secure future credit.

Soft Pull vs. Hard Pull

• Soft pull: A credit check that doesn’t impact your score (used in pre-qualifications)

• Hard pull: A full inquiry that can temporarily lower your score
  MFC uses soft pulls whenever possible to protect your credit profile.

Debt-to-Income Ratio (DTI)

A measure of how much of your income goes toward debt. Keeping this low is key to staying fundable—especially when planning to stack credit or liquidate limits.

Business Credit Bureaus

Entities that track your business’s credit behavior. The main three are:

• Dun & Bradstreet

• Experian Business

• Equifax Business

Building and maintaining a solid profile with these is crucial for long-term credit access.

Alternative Financing

Any funding method that’s not a traditional bank loan—like credit conversion, crowdfunding, equipment leasing, or revenue-based funding. This is often faster and more accessible for small businesses.

Equipment Financing

A form of funding used to purchase business equipment. Sometimes combined with credit conversion for down payments or vendor cash discounts.

Term Loan vs Line of Credit

• Term Loan: A lump sum with fixed payments over time

• Line of Credit: Flexible, revolving credit that can be reused
  Knowing which is right for your needs is part of a smart funding strategy.

Liquid Capital

Cash you can actually use. Converting credit into liquid capital is what allows entrepreneurs to grow, pivot, or stabilize—fast.

Cash Advance

A cash withdrawal from a credit card, often with very high fees, interest rates, and no grace period. Many business owners mistakenly assume this is the only way to access credit as cash. At MFC, our method avoids the pitfalls of traditional cash advances by offering a compliant, strategic credit conversion process with lower costs and better outcomes.

Earnest Money Deposit

A good faith deposit made during a real estate transaction to show the buyer’s serious intent. Many title companies don’t accept credit cards, making credit conversion (credit liquidation) an ideal solution for covering earnest money without liquid savings on hand.

Want to Put This Into Action?

At MFC, we specialize in helping qualified business owners turn their existing credit into working capital—without loans, without giving up equity, and without falling into high-interest debt.

📩 Book a free consultation to find out how much credit you can convert today.