Funding Flashcards
All income = ?
= Net profit - taxes, expenses
The grouping of Funding?
- Internal sources
* Personal Funds
* Retained profit
* Sale of assets - External sources
* Private Investors
* Loan capital(different kinds)
What is retained profit = ?
= Net profit - Dividend
dividend: the money that a company pays to the shareholders
What are assets?
Anything you can use to generate money in the company
What is collatoral?
Something you have to pay to the bank if you fail to pay the loan
What is the fixed interest rate?
(loan capital)
A fixed interest rate is an unchanging rate charged on a liability, such as a loan or mortgage. It might apply during the entire term of the loan or for just part of the term, but it remains the same throughout a set period.
What is the Variable/floating interest rate?
(loan capital)
A floating interest rate, refers to any type of debt instrument, that does not have a fixed rate of interest over the life of the instrument. Floating interest rates typically change based on a reference rate
(hungary: 12.84)
Business development loan
(loan capital)
cheap interest, long time to pay back, government gives them
What are Bonds?
You can buy them at the bank. You loan money to the business.
yield: the annual percentage, it tells you how safe it is to take a bond
If a company goes bankrupt in what order does the people get paid?
(loan capital)
- Bondholders
- Employees
- Other companies they owe money to
- shareholders
What is a dementure?
(loan capital)
It is a bond without a collatoral, if the company goes bankrupt you get nothing.
higher yield -› incentive
What is overdrafting?
(loan capital)
Taking a not planned loan
+ taking the money immediately
- interest rates are very high to force you to pay it back as early as possible
What is trade credit?
(loan capital)
A trade between two companies, when one only pays after using/getting the survices, keeps people in business
Insolvancy
When a company does not have enough cash but it is not bankrupt
What is a grant or subsidy?
(loan capital)
Grant: Government gives the money, companies do not have to pay it back
Subsidy: not money, but like tax break
- lots of paperwork
example: youth unemployment
What is debt factoring?
(loan capital)
Selling the debt to debt collecting companies who then make the person/company pay
The company who is owed to does not get the original amount of money back but it is more than nothing
Who are Venture capitalists or Business angels?
(loan capital)
it is mostly a person(but it can be a company too), they try to find the next good things and fund them
+ money, advice, contacts
- venture capitalists tend to take over the control
business angel: cares more about the idea
venture capitalist: cares more sbout the money
What is IPO or shared issue?
(loan capital)
When the company goes on the stock market(not for new companies 10-20 years)
+ free money
- but giving away some control
IPO: Initial Public Offering
What is Crowdfunding?
(loan capital)
Investing but no profit, instead some kind of benefits
pl: patrion.com
kickstarter.com
