Source Of Finances

Question 1

Benefits of business plan

Answer 1

Improves chances of business survival, sets objectives, avoids unnecessary risks

Question 2

Internal source of finance

Answer 2

Funding obtained from business itself. E.g-retained

Question 3

External source of finance

Answer 3

Funding obtained from outside of the business. E.g-bank loan

Question 4

Sources of finance

Answer 4

Trade credit, owners savings, hire purchase, venture capitalist, share issue

Question 5

Hire purchase

Answer 5

Business pays initial deposit to acquire item and make regular payments

Question 6

Venture capitalist

Answer 6

Person who invests in project in which there is an element of risk

Question 7

Share issue

Answer 7

Involves issuing further shares to family, friends or public

Question 8

Security

Answer 8

Something the business owns. E.g-investments that will be taken by the bank if business fails to keep up with loan repayments

Question 9

Mortgage

Answer 9

Long term loan secured on a property, repaid in instalments over a period of time (25 years)