Raising Finance

Question 1

the main sources of finance for a start-up business: (5)

Answer 1

personal sources
ordinary share capital
venture capital 
loan capital (bank loans)
bank overdrafts

Question 2

ordinary share capital:

Answer 2

money given to a company by share-holders in return for a share certificate that gives them part ownership of the company and entitles them to a share of the profits.

Question 3

loan capital:

Answer 3

money received by an organisation in return for the organisations agreement to pay interest during the period of the loan and to repay the loan within an agreed time.

Question 4

bank loan:

Answer 4

a sum of money provided to a firm or an individual by a bank for a specific, agreed purpose.

Question 5

bank overdraft:

Answer 5

when a bank allows an individual or organisation to overspend its current account in the bank up to an agreed (overdraft) limit and for a stated time period.