Postal code

Credit Professionals Alliance

Cash Discount

Discount allowed for payment in advance of invoice due date. Usually stated as a percentage of the invoice price. (For example, 2/10/30 means 2% discount if paid in ten days, otherwise the net amount is due in 30 days.)

Confirmed Letter of Credit

A letter of credit which is guaranteed by a second bank (usually a domestic bank) in case the issuing bank is financially unable to pay. Normally used where the issuing bank's strength is doubtful or there is substantial country risk.

Conditional Lien Waiver

A lien waiver that is contingent upon some future action.

Cross-Corporate Guarantee

A guarantee from one company that they will pay if the principal debtor defaults.

Lien Waiver

An agreement by a party with a right of lien that they will waive their rights in exchange for consideration.

Mechanics Lien

A legal interest in real property granted to a contractor or material supplier to assure payment for labor and materials used on the property.

Partial Lien Waiver

A lien waiver surrendering the right to lien property up to a specific date or amount of money.

Payment Bond

In the construction industry, an insurance policy in favor of subcontractors and material suppliers insuring that payment will be made if the general contractor defaults.

Personal Guarantee

A document signed by an individual promising that he/she will be responsible for payment if the principal debtor defaults.


Payment terms tied to a calendar date rather than elapsed time. Abbreviated "Prox." For example, Net 25th Prox means payment due 25th of the month following purchase date.

Standby L/C

A Letter of Credit which acts to secure a transaction or series of transactions. The bank agrees to pay the seller if the conditions of the credit are met and the buyer defaults.

Terms of Sale

The agreement between buyer and seller regarding the terms and conditions under which a sale of goods or services is made.


Uniform Commercial Code. A set of standards, adopted by the vast majority of states, governing contracts. In the absence of agreement to the contrary, UCC terms are assumed to apply.



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