Business Finance – sources Flashcards
Why might a business need finance in the short term?
To cover day-to-day costs like wages, stock, or utility bills.
Why might a business need finance in the long term?
For bigger investments like machinery, buildings, or business expansion.
Why do new businesses need finance?
To cover start-up costs like equipment, marketing, and renting premises.
Why do growing businesses need finance?
To fund expansion such as entering new markets or increasing production.
What are internal sources of finance?
Finance raised from within the business.
What is personal savings as a source of finance?
When owners use their own money to fund the business, often during start-up.
What is retained profit?
Profit kept in the business instead of being paid out to owners/shareholders.
What does ‘selling assets’ mean in finance?
Selling things the business owns (like equipment or vehicles) to raise money.
What are external sources of finance?
Finance raised from outside the business.
What is an overdraft?
A short-term loan from a bank that lets a business spend more than it has in its account.
What are trade payables?
When suppliers allow a business to buy now and pay later — a type of short-term credit.
What is loan capital?
Money borrowed from a bank or other lender, usually repaid with interest over time.
What is share capital?
Money raised by selling shares in the business.
What is stock market flotation?
When a business becomes a public limited company (PLC) and sells shares to the public on the stock market.
What is venture capital?
Investment from individuals or firms in exchange for a share of ownership — often used by startups with high growth potential.
What is crowdfunding?
Raising small amounts of money from a large number of people, often via the internet.
