Sources of finance Flashcards
Ways to make money
Loan
Fundraising
Investment
Donation
Why do businesses need finance for starting up
raw materials, buildings and equipment
Why do businesses need finance for working capital
short term finance required for day to day running of business
why do businesses need finance for unforeseen events
sudden decline in sales
Types of sources of finance
internal - capital from within business
external - capital from external stakeholders
Examples of internal source of finance
family and friends
owner’s savings
retained profit - carried from previous year
selling unwanted assets
Mortgage
Type of loan that are specific to buying property
Overdraft
Business can spend up to an agreed amount more than what they have for a certain period of time
share issue
Selling shares means company is not committed to pay interest as it would be if it arranged a loan
trade credit
giving people more time to pay for product or service
hire purchase
expensive way of purchasing, a business will not own an item until it is completely paid for
payed in instalments
selling assets
selling things you dont need for money
