Short term sources of Finance Flashcards
1
Q
What is a bank Overdraft?
A
Allows you to over withdraw money not in your account and interest is only charged on amount over withdrawn.
2
Q
What is a Credit Term?
A
A trading business may be able to negotiate 30 day or more payment terms from a supplier of inventory
3
Q
What is Factoring Debtors?
A
This is when you sell of your debtors to a factoring company in order to receive funds straight away. you may not receive the full amount of money you would have received from your debtors but your receive instant cash.
4
Q
What is a commercial bill?
A
Bill of exchange issued by a bank to a company which is usually for 1 to 6 months. The bank can require immediate repayment whenever they choose
