internal sources of finance

Question 1

what may the enterprise provide when they require money depending on the purpose?

Answer 1

may be able to provide the finance itself

Question 2

personal sources:
why does most entrepreneurs supply the majority of the start-up capital themselves?

Answer 2

because profits have yet to be made

Question 3

personal sources: own savings (disadvantages)
what is not payable?

Answer 3

no interest is payable

Question 4

personal sources: own savings (disadvantages)
what may the entrepreneur not have to invest in the enterprise?

Answer 4

sufficient savings

Question 5

personal sources: own savings (disadvantages)
what happens if the enterprise falls?

Answer 5

the owner may lose their investment

Question 6

personal sources: own savings (advantages)
what may the entrepreneur get back if the enterprise is successful?

Answer 6

may get back to their investment with a profit over time

Question 7

personal sources: credit cards
what are the most common method of finance used by entrepreneurs?

Answer 7

credit cards

Question 8

personal sources: credit cards
what can credit cards be used to purchase?

Answer 8

stock and finance business trips and pay hotel bills

Question 9

personal sources: credit cards (advantages)
what is credit card an instant source of?

Answer 9

finance

Question 10

personal sources: credit cards (advantages)
what does it allow purchases to be made for?

Answer 10

Allows purchases to be made on behalf of the enterprise

Question 11

personal sources: credit cards (disadvantages)
how can interest rate become high?

Answer 11

if the amount is not paid back within the interest-free period

Question 12

personal sources: credit cards (disadvantages)
what are credit cards only suitable for?

Answer 12

purchases up to an agreed credit limit

Question 13

personal sources: borrowing from friends and family
what is this considered as to raise funds?

Answer 13

can be a quick and easy method

Question 14

personal sources: borrowing from friends and family
what can they all agree on?

Answer 14

a more flexible repayment

Question 15

personal sources: borrowing from friends and family
what does it lower?

Answer 15

the interest rate

Question 16

personal sources: borrowing from friends and family
why can they fall out?

Answer 16

if there are different expectations between lender and entrepreneur.

Question 17

retained profits:
what are retained profits?

Answer 17

Profits can be held back in the enterprise and be used to finance growth

Question 18

retained profits: what does this mean for money and interest?

Answer 18

Money does not have to be repaid and no interest is payable

Question 19

retained profits: who will not be able to be at the stage of retained profits?

Answer 19

new enterprises

Question 20

retained profits: what will enterprises not be able to do if they do not make sufficient profits?

Answer 20

unable to to invest them back into
to invest in the enterprise

Question 21

sale of assets:
why can vehicles, premises owned by the enterprise, machinery and equipment can be sold? (3)

Answer 21

to give the enterprise cash to pay short-term liabilities
to address cash flow problems
to reinvest in the enterprise

Question 22

sale of assets:
what is this a good way of?

Answer 22

to raise money from assets that are no longer in need

Question 23

sale of assets:
what could it avoid?

Answer 23

the need of a loan

Question 24

sale of assets:
what could enterprises not have that they can sell?

Answer 24

assets

Question 25

sale of assets:
what could take time?

Answer 25

to sell larger assets