Finance Flashcards
What is owners capital?
Personal savings of the owner which is invested into the business.
What is retained profit?
Profit which has been saved over a number of years, which can be used for the business.
What is sale of assets?
Is when the business sells stuff it owns.
What are the external sources of finance?
Family and friends Banks Peer-to-Peter funding Crowd funding Other businesses
What is family and friends?
When family and friends invest into the business.
What is peer-to-peer funding?
When a friend helps out another friend by investing into their business.
What is a business angel?
When rich people or other businesses owners, with more experience invest into the business.
What is crowd funding?
When random people invest small amounts into your business via a website, which you advertise for investments.
What are the methods of finance?
Loans Share capital Venture capital Overdrafts Leasing Trade credit Grants
What is a loan?
A loan comes from a bank, family or friends. It tends to be a large amount, and can be demanded back at any point.
What is share capital?
Share capital is when the owner sells shares of the business in order to get investments.
What is venture capital?
Investments from by experienced business people in return for ownership or shares. They also can provide advice.
What is a overdraft?
When the bank allows a businesses allowance to go into a deficit.
What is leasing?
Is when a business is given assets by other businesses for a short period of time.
What is trade credit?
When a business pays for supplies without immediate payment. It can be payed after a period of time.
