business finance Flashcards
Retained Profit
Using profit made in the business. Can leave all or some of its money in the business and reinvest
Working Capital
The money available on a day-to-day basis. Current asset - Current liabilities.
Sale of Assets
Established business’ are able to sell off assets which are no longer required
Bank Loans
Money that is lent to a business that has interest rates which are paid back overtime .
Overdrafts
When money is withdrawn from a bank account and the balance goes below zero
Trade Credit
Allows a business to pay for stock and pay at a later date
Leasing
Borrowing and using a product or service and paying for it as long as you need it
Hire Purchase
A type of credit agreement where a business agrees to buy an asset from a lender for a specific period of time
Commercial Mortgages
A loan that is secured against a commercial asset with the flexibility of re-payments (Long term Liability)
Sale and Lease back
An asset that is previously owned by the seller is sold to someone else and then leased back to the owner
Share Capital
The amount of money the owners have invested in the business as represented by common and/or preferred shares
Venture Capitalists
An investor who provides capital for young businesses in return for equity
Government Grants
Both local and central governments may offer finance to business start-up schemes
