sources of finance Flashcards
owner’s personal finance
Includes personal savings and money borrowed from family and friends.
retained profits
A business holding back profits from previous years.
sale of assets
Selling something that the business no longer needs.
Sell and lease back
Selling an asset and leasing (renting) it back.
share issue
Selling shares in the business. PLCs sell on the stock market. Ltds sell shares privately.
debuntures
Loans borrowed from individuals through the stock market.
bank overdraft
A facility which allows a business to spend more money than is in its bank account.
trade credit
Allows a business to buy goods from suppliers and pay for them at a later date.
debt factoring
A business sells its unpaid customer invoices to a factoring company. The factoring company then collects and keeps the customers’ debts.
grants
Money is given to a business from central or local government, the EU or the Prince’s Trust.
bank loan
A bank agrees to lend a business money for a specific purpose, for a fixed period of time. Regular repayment instalments are put in place.
hire purchase
A business can buy an asset by paying an initial deposit and then monthly payments for a fixed period of time.
mortgage
A large sum of money borrowed from a bank or building society secured on a property
venture capitalists
Organisations that invest in established businesses in return for equity (ownership percentage).
crowd funding
Small amounts of money from a large number of people are raised to fund a new business or a project. This is typically done via the internet, e.g. Kickstarter.
