Expressions using Themes (e.g. Collocations, IELTS, Business English)
Here we look at many common expressions and vocabulary you might find in the Finance sector, but which are also suitable for everyday discussions about money or financial situations.
An overdraft is an extension of credit given by a lending institution when an account drops to zero. The overdraft gives the account holder the permission to continue withdrawing money when the account has no funds in it or has insufficient funds to cover the amount of the withdrawal.
It is a loan which you request from your bank or lending institution. But, unlike normal loans whereby the repayments are fixed over a set period, overdrafts are a form of revolving credit, much like credit cards. You and your lending institution can decide the limit.
“I was worried I wouldn’t have enough money to get a present for my husband for his birthday, but then I remembered I was approved for an overdraft. I can use that if I run out of money.”
“I never use my overdraft, but it’s very handy to have in case of an emergency. You never know when you’ll need it until you need it!”
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. As company operations end, the remaining assets are used to pay creditors and shareholders, based on the priority of their claims. The company name remains live, but its status switches to 'Liquidation'. The removal of the name only comes about on dissolution, which is approximately three months after the closure of the liquidation.
Solvent liquidation usually involves a director’s retirement, or it may be the process chosen when a business serves no further useful purpose. This is called a Member’s Voluntary Liquidation (MVL).
Insolvent liquidation occurs when a company cannot carry on for financial reasons. The overall aim of an insolvent liquidation process is to provide a dividend for all classes of creditor, but it is often the case that unsecured creditors receive little, if any, return.
“Shareholders will today vote on a voluntary solvent liquidation of the company due to a number of directors announcing retirement.”
“The liquidator is under a statutory duty to collect its assets due to the insolvent liquidation of the company. The plans describe the situation to be closed, and the company will cease to exist within three months.”
A golden handshake is an idiomatic expression that is most commonly heard in upper management and is used when is laid off or retires early and is given a large amount of money as redundancy.
“When the company closed, they gave the directors a golden handshake for their roles in the company. Some of them were with the company for decades and received a lucrative package.”
“At the turn of the new year, many of the board members were seeking retirement. The company granted their wishes with a golden handshake as the icing on the cake.”
This idiom is used both socially and professionally, and means that there is not an endless supply of money to buy whatever one wants; or that money is not easy to come by and hard work is required. In a social situation, this is commonly used by parents to their children. In a professional situation, you might hear it in a board room when discussing finances and someone has requested monies for something of low priority.
“So, in a meeting with HR last week we discussed the need for a gym on site for employees. Is there any financial wiggle room that would allow us to afford a gym?” “I understand that this might improve employee morale, but at the moment we need to focus on our clients' needs. Money doesn’t grow on trees, and there are currently more important things on the table.”
“I’d love to approve all the requests sent in today, but the reality is we just don't have the funding. As you know, money doesn’t grow on trees, but if we work hard this year and achieve our goals, I’m sure we can stretch our finances to approve some of these requests next year.”
When someone breaks the bank, it means they overspend. The term originated in the world of gambling, but is used in everyday speech and in professional environments, like finance.
“I’m delighted to announce that next year we will move to an office equipped to deal with our continuous growth. Although we nearly broke the bank with this new office, we’re happy to spend this money to make working life easier and more enjoyable for our employees.”
“I’ve got some terrible news, Mr. Logica. Because of the past few month’s overspending, we’ve broken the bank, and it looks like we could go into liquidation by early next year. If we stick to this plan I’ve set out, we could see light at the end of the tunnel, but we have to be strict with outgoings from now on.”