external finance Flashcards
authorised share capital
the maximum amount that can be legally raised
bank overdraft
an agreement between a business and a bank, that means a business can spend more money than it has in its account (going overdrawn)
the overdraft limit is agreed and interest is only charged when the business goes overdrawn
capital gain
the profit made from selling a share for more than it was bought
crowd funding
where a large number of individuals (the crowd) invest in a business or project on the internet, avoiding the use of bank
lease
a contract to acquire the use of resources such as property or equipment
peer-to-peer lending (P2PL)
where individuals lend to other individuals without prior knowledge of them, on the internet
debenture
a long term loan to a business
equities
another name for ordinary share
ordinary share
a share entitling its holder to dividends
external finance
money raised from outside the business
issued share capital
amount of current share capital arising from the sale of shares
permanent capital
share capital that is never repaid by the company
secured loans
a loan where the lender requires security, such as property, to provide protection in case the borrower defaults - failure to fulfil an obligation (repaying the loan)
share capital
the money invested in a company by the shareholders, it is a long-term source of finance
unsecured loans
where the lender has no protection if the borrower fails to pay back the money they owe
