External Finance

Question 1

What is External Finance?

Answer 1

Money generated from outside the business.

Question 2

Different types of Ext Finance.
(aim to give 3)

Answer 2

-Family and Friends
-Banks
-Peer-to-peer funding
-Business angels
-Crowdfunding
-Other businesses

Question 3

Advantage and Disadvantages of Family and Friends.

Answer 3

adv- Repayment terms may be more flexible

disadv- Amount available is limited
disadv- May put pressure on relationships

Question 4

Advantage and Disadvantages of Banks.

Answer 4

adv- Specialist employees who may offer expertise and help

disadv- Repayment terms and conditions will be fixed with consequences if not met

Question 5

Advantage and Disadvantages of Business Angels.

Answer 5

adv- Can offer advice to the new business

disadv- Can be seen as higher risk if the business is not established
disadv- The entrepreneur will need to demonstrate good understanding.