paying capacity

A family reviews their monthly budget to assess their paying capacity.

Definition

1. Noun:
   • Financial ability to pay: "paying capacity" refers to the maximum amount of money an individual, company, or entity can afford to pay for goods, services, debts, or taxes without causing financial hardship or default. It is a measure of solvency or creditworthiness.

Usage Examples

• (The bank evaluated how much the borrower could afford to repay.)
• (A financially stable company has more leverage in business dealings.)

Advanced Usage

• "to have paying capacity": to possess the financial resources to meet obligations.

  • The charity only assists families with limited paying capacity for medical expenses. (The charity helps families who cannot afford full medical costs.)

• "to evaluate paying capacity": to assess the ability to pay, often in financial, legal, or tax contexts.

  • Tax authorities evaluate a business's paying capacity to determine appropriate tax rates. (Tax officials analyze a company's financial health to set fair tax burdens.)

Variants and Related Words

• Paying (adj): relating to the act of giving money in exchange for something.

  • This is a paying job. (This job offers monetary compensation.)

• Capacity (n): the maximum amount that something can contain or produce; here, financial ability.

  • The factory's production capacity is 10,000 units per month. (The factory can produce up to 10,000 units monthly.)

Synonyms

• Ability to pay: the financial means to settle debts or purchases.
• Creditworthiness: the likelihood that a borrower can repay loans.
• Solvency: the state of having enough assets to cover liabilities.

Phrasal Verbs

• Pay off: to repay a debt completely.

  • His paying capacity allowed him to pay off the mortgage in ten years. (His financial ability enabled him to clear the mortgage fully.)

• Pay down: to reduce the amount of a debt.

  • She used her bonus to pay down her credit card balance, reflecting her strong paying capacity. (She reduced her debt using extra income.)

Related Idioms

• Live within one's means: to spend only what one can afford.

  • The family's paying capacity is limited, so they must live within their means. (They cannot spend beyond their financial ability.)

• Bite off more than one can chew: to take on more financial responsibility than one can handle.

  • The investor's paying capacity was exceeded when he bought too many properties; he bit off more than he could chew. (He took on debts beyond his ability to pay.)