7 - Why Businesses Plan Flashcards
Understand why businesses plan
Credit Card
A plastic card which enables goods to be purchased on credit.
Trade Credit
When a supplier allows you a period of time (such as 30 days) to pay for goods and services.
Hire Purchase
Allows business to have use of assets without large initial investments up front.
Business pays a deposit to acquire item and then makes regular payments for a set period of time.
Mortgage
A long term loan to purchase property or business premises. Repaid over a set period of time typically 25 years, but different repayment periods can be set. Business owns the property on the final payment.
A person or company who invests (buys shares in a business) which has considerable risk, in the hope will grow fast.
Venture Capitalist
Business overdraft
Where you can use more money then you actually have in an account. Helping businesses in the short term.
Loans
An amount of money borrowed from the bank and then repaid with interest over a set period of time. The loan period can range from 1 year to 10 years.
Crowd funding
Funding a project by raising small amounts of money from many people.
What is the benefit of share issue?
To gain a large source of income and expand the business.
Reserves
Liquid assets held by a bank, company or government in order to meet expected future payments and/or emergency needs.
Advantages of savings?
They won’t have to borrow long term and they won’t get charged any interest on the money they have saved.
