Influences on financial management

Question 1

overdraft

Answer 1

when a bank allows a business or individual to overdraw their account up to an agreed limit and for a specified time, to help overcome a temporary cash shortfall

Question 2

commercial bills

Answer 2

primarily short-term loans issued by financial institutions, for larger amounts (usually over $100 000) for a period of generally between 30 and 180 days

Question 3

factoring

Answer 3

the selling of accounts receivable for a discounted price to a finance or factoring company

Question 4

mortgage

Answer 4

a loan secured by the property of the borrower (business)

Question 5

debenture

Answer 5

a promise issued by a company to repay a loan for a fixed rate of interest and for a fixed period of time

Question 6

unsecured note

Answer 6

a loan from investors for a set period of time. Unsecured notes are not secured against the business’s assets.

Question 7

leasing

Answer 7

the payment of money for the use of equipment that is owned by another party

Question 8

share issues

Answer 8

traded shares from a private company

Question 9

private equity

Answer 9

an alternate investment class that investment class that invest in or acquires private companies.