3.1-Business finance sources Flashcards
what are short-term needs
finance needed to fund day-to-day expenditure
what are long-term needs
finance used to fund expenditure over a large period of time
what is start-up capital
funds used when first setting up a business
what are internal sources of finance
finance generated by the business form its own means
what are examples of internal sources of finance
-personal savings
-retained profit
-selling assets
what is retained profit
Profit made in previous years that is available to reinvest in a business
what is selling assets
Money from the sale of equipment, vehicles land, buildings or reduced-price inventory that the business alredy owns
what are external sources of finance
money that is introduced into the business from outside
what are examples of internal sources of finance
-overdraft
-trade credit
-loans
-share capital
-venture capital
-crowdfunding
what is an overdraft
an arrangement with the bank so the business can use more money than it has on its account
what is trade credit
an arrangement with the supplier so the business can pay for the product days after they get it
what is a loan
a sum of money borrowed and repaid ( with interest )
over a set time
what is share capital
money raised from the sale of shares
