external sources of finance

Question 1

short term (3)

Answer 1

• trade credit
• overdraft
• credit card

Question 2

medium term(3)

Answer 2

• leasing
• hire purchase
• loan

Question 3

long term(4)

Answer 3

• loan(mortgage)
• issue shares
• grants
• selling equity
• venture capital

Question 4

define trade credit

Answer 4

agreement where a customer can purchase goods on account, that is, without making immediate cash payments

Question 5

define overdraft

Answer 5

deficit in a bank account caused drawing more money than the account holds

Question 6

define credit card

Answer 6

card issued by a financial company giving the holder an option to borrow funds

Question 7

define leasing

Answer 7

a financial arrangement in which a person, company, etc. pays to use land, a vehicle, etc. for a particular period of time

Question 8

define hire purchase

Answer 8

system by which one pays for a thing in regular instalments while having use of it

Question 9

define a loan

Answer 9

thing that is borrowed, especially a sum of money that is expected to be paid back with interest

Question 10

define issue sharing

Answer 10

company makes new shares available for sale, or the number of shares offered

Question 11

define a grant

Answer 11

sum of money given by a government or other organization for a particular purpose

Question 12

define selling equity

Answer 12

the sale of the common shares of a company

Question 13

define venture capital

Answer 13

capital invested in a project in which there is a substantial element of risk