Definitions Flashcards
Overdraft
The bank extends the money available to the account holder above what they actually have
Loan
Temporary transfer of money from lender to borrower who agrees to pay it back with interest
Trade credit
Attaining products or stock and paying for them later after a set period
Factoring
Business owes money to supplier. A third party comes in and buys the debt and the business pays them back
Hire purchase
Paying instalments whilst using the product, then a final instalment at the end to own it.
Leasing
Giving another business the rights to use your assets
Debentures
Long term loan with fixed interest rate
Retained profit
Profits not given as dividends and instead reinvested into the business
Shares
Business sells a small percentage of the business
Government assistance
Subsidy or grant offered by the government for a purpose
