Facility Guarantee

See Bank-to-Bank Guarantee. 

Factoring

Factoring is an arrangement that allows a business to realise the cash benefit of its sales immediately. This is achieved by assigning sales invoices to a Factor who typically pays a certain amount of their face value to the borrower with the balance (less costs) being paid once payment is received from the debtor. 

FAQ

Frequently Asked Questions. Saves you money because you can solve your problem without paying the £1 or more per minute charged by most ISP technical helplines. Saves the ISPs hassle by being asked the same questions over and over again.

Fax indemnity

An indemnity requested by a bank to cover the bank against loss, should it act upon instructions received on a fraudulent facsimile (fax) message.

Fidelity Guarantee

This cover relates to loss of money or goods (including stock) caused by the dishonesty of employees. 

Finance Lease

A form of leasing whereby the lessor expects to recover in full the capital cost of the asset, money costs and profit during the primary period of the lease.

FHBR (Finance House Base Rate)

A calculated rate, derived from the average of 3 month LIBOR over the previous 8 weeks, rounded up to the nearest 0.5%.

Financed Bills

Bills of Exchange sent on collection, in which the remitting bank has a financial interest.

Financial Adviser

Someone authorised by the FSA(Financial Services Authority) to provide advice on financial products. 

Financial Planning Manager

The job title of financial advisers working for HSBC. Financial Planning Managers can only advise on HSBC products.

Financial Services Authority (FSA)

The organisation that regulates the sales and marketing of financial products such as pensions.

Firewalls

A firewall is a security system installed on a network to restrict internal and external traffic. It can be used to block unauthorised users from access to private networks such as intranets. All messages entering or leaving the intranet pass through the firewall, which examines each message and blocks those that do not meet the specified security criteria. 

First Demand Guarantee

See Demand Guarantee.

First Loss

First loss is only applicable to HSBC Invoice Finance (UK) Ltd Credit Protection Service. The First Loss in relation to each customer at any time, is the amount outstanding that is not subject to credit protection even if it is within a credit protected limit.

Fixed Assets

Assets the business intends to keep and use within the business (for a period of more than one year or one accounting period). Generally includes land, machinery subject to depreciation, buildings, fixtures and fittings subject to wear and tear), but not things used up by the business. Can be tangible (e.g. land) or intangible (e.g. trademarks and patents). 

Fixed Interest Rate

An interest rate that is agreed and does not vary during a specified period, even if Bank Base rate moves.

Fixed Rate Deposit

A deposit that pays a fixed rate of interest over a specified period of time. 

Fixed Rate Loan

A loan over a specified period of time which has a fixed interest rate applied to it. 

Floating Interest Rate

A rate of interest that can change over the lifetime of either a deposit or a loan.

Floor Limit

A set value, above which a business (merchant) must request authorisation. The limit is set by the bank but may be varied from time to time. For example, if there is a high incidence of fraud in an area or particular type of business.

Floppy Disk

A small portable storage device for data (words, pictures etc). Cheap and easy but does not hold bigger or more complicated files and may be damaged.

Flotation

Entry of a company onto the stock market.

Font

Different word processing typefaces (styles). Examples include Times New Roman and Ariel.

Foreign Bill Purchased (FBP)

A bill of exchange remitted by one bank to another, in which the remitting bank is financing for the exporter. 

Foreign Exchange

The exchange of one currency for another at an exchange rate.

Forfaiting

Derived from the French á forfait which means to surrender or relinquish the rights to something. In return for a cash payment from a forfaiter, an exporter agrees to surrender or relinquish the rights to claims for payment on goods or services delivered to a buyer.

Forward Contract

An obligation to exchange a fixed amount of one currency for another at an agreed rate at a specific date in the future or between two agreed dates (also see Option Forward).

Forward Points

The price adjustment made to the spot exchange rate in order to ascertain a forward contract rate.  The forward contract points reflect the difference between the interest rates of the two currencies to be exchanged. 

Franchisee

Someone who buys into a franchise, usually paying a fee to do so. 

Franchising

Franchising is where a business allows a person to set up an operation using the business's own trademarks, marketing strength and support systems. Stock may be supplied to the franchisee with a percentage profit for the franchisor; alternatively a fixed monthly franchise fee may be charged. The franchisee will also usually pay a capital sum to buy into the franchise. A franchise can offer a successful business concept, proven marketing and operational methods, ongoing support, an established identity and a low failure rate. Franchising provides businesses with an opportunity for expansion without an enormous outlay of capital. They can benefit from 100% commitment from their franchisees who have a real stake in the business. Examples of well-known franchises include McDonalds and Benetton.

Franchisor

The business granting franchise licences over its business model to franchisees in return for an initial fee and ongoing fees. 

Freely Floating

A currency which has no direct reliance on another.

Freight

Goods OR the cost of transporting goods. 

Freight Collect

On the bill of lading, this indicates that the cost of freight is to be paid by the Buyer at the port of discharge.

Freight Pre-paid

On the bill of lading, this indicates that the cost of freight has been paid by the Shipper.

FSA (Financial Services Authority)

The organisation that regulates the sales and marketing of financial products such as pensions