3e Source of finance Flashcards
1
Q
What are the 4 types of sources of finance?
A
Equity capital
Debt capital
Overdraft facilities
Grants
2
Q
What is equity capital?
A
Equity capital is money contributed to a business by an investor in exchange for partial ownership.
3
Q
What is debt capital?
A
Debt capital is money that has been lent to a business by an external source.
4
Q
What is a grant?
A
A grant is money given by a government or another organisation for a particular reason
5
Q
What are overdraft facilities?
A
Overdraft facilities are agreements between banks and businesses or individuals, that allow a bank account to be withdrawn below zero.
6
Q
What do businesses have to do with financial planning?
A
Keep accurate financial records Maintain enough cash flow to operate Keep track of stock/inventory Pay their supplier bills on time Pay their staff fairly and on time Pay taxes on time and keep an accurate record Save money for future business growth
