Sources Of Finance Flashcards
What is interest?
a fee paid for the use of another party’s money
What is an asset?
something valuable that an entity owns
What is retained profit?
profits that are reinvested into the business rather than paid to shareholders as dividends
What is owner’s capital?
refers to the amount of money that the owner or owners have invested in a business
What is a bank loan?
a sum of money that a bank lends to a business which must be repaid with interest over a specific period
What is an overdraft?
where the bank lets you spend more money than you have
Peer to Peer funding
type of lending in which you get a loan from an individual
Business Angel // Venture Capitalist
an investor who is willing to invest high risk, high growing firms at a very early stage
carry out the role of a mentor to entrepreneurships
Crowdfunding
funding a project or venture by raising small amounts of money from a large number of people who in return get some form of reward e.g a prototype or discounts
Share capital
funds that a company raises in exchange for issuing an ownership interest in the company in the form of shares
Leasing
process by which a firm can obtain the use of a non-current asset for which it must pay the regular payments rather than purchasing the asset outright
Grants
a sum of money given by the government or other organisation for a particular purpose - good cause
do not need to be repaid
Trade Credit
an agreement between business and its supplier that allows the exchange of goods and services without any immediate exchange of money - buy now pay later
