external sources of finance Flashcards
1
Q
external sources
A
are sources of money from outside the business
2
Q
bank loan advantages
A
- repayments in installments
- makes cash flow easier
- don’t have to issue shares
3
Q
bank loan disadvantages
A
- have to pay back with interest.
- have to back up loans with security.
4
Q
advantages of overdraft
A
- enable short term funding
- flexibility to review the funding
- covers day to day expenses.
5
Q
advantages of grants
A
- doesn’t have to be paid back
- helps start up new businesses
- creates jobs
6
Q
disadvantages on grants
A
- based on application.
- not available for all businesses.
7
Q
advantages of venture capital
A
- potential for large sums of money
- expertise to help the business
- makes it easier to attract other sources
8
Q
disadvantages of venture capital
A
- lose a percentage of the business.
- a long and complex process.
- risk of conflict.
