Finance Flashcards
What is a bank loan?
Where you borrow money from the bank
What is meant going overdraft?
Taking money out you your bank that you dont have will be recorded as in debt
What is trade credit?
When a business trades with another to exchange goods
What is retained profit?
After about a year or so a company will make some profit so they can re invest in there company
What is sale of assets?
The business may need to raise there finance
* the business cannot get a loan and has no retained profit
*They decide they have a stock of new machinery that is no longer needed so they can sell it.
* The machinery is a asset to the business
* They business may have a premises (factory or building) that they could sell.
What is owners capital?
The owner could have savings to help the business
what is new partners capital?
*A business partnership may decide to bring in a new partner
* This means they can invest in the business
*partnerships are usually a group of experts
What is share issue?
*Limited companies can issue shares in return for money, to raise funds to grow or expand
*Private limited company – can issue shares to friends and family of the owners only (ltd)
*Public limited company can float the share issue on the stock market and sell to anyone (plc)
What is crowdfunding?
*Investors and customers put up the money to get a product made.
*Investors are placing their faith in an idea.
*Customers are pre-ordering a product.
*Crowdfunding helps everyday businesses find the capital they need to get off the ground, create new jobs and make the UK a leading centre for innovation and growth
