External Sources Of Finance Flashcards
1
Q
Owners capital
A
Exisiting investors put more money into the business. However its limited by the funds available to the owners.
2
Q
Loans
A
Money borrowed at an agreed rate of interest. Repayments are spread over a period of tine allowing the business to budget. However interest payments can be high
3
Q
Venture capital
A
Funds from an investor in return for a share of the ownership of the business. Investor can offer support. However may lose management control(descions)
4
Q
Trade credit
A
Business has use of goods immediately , pays back supplier 30-90 days later. Business is able to sell on the goods before they pay for them.
Good for cash flow and no interest paid.
Business will not receive cash discounts
