Sources of finance Flashcards

1
Q

Personal savings

A

+ Paid back with interest
+ Don’t need approval for use

-Can lose your money

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2
Q

Investment from family and friends

A

+ Keen to support you
+ Charge lower interest

-Can lose their money and create tension

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3
Q

Bank overdrafts

A

Short term lending from the bank when there is no money left in the accounts.

+ Covers short term financial issue

-Only short term
-High interest

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4
Q

Bank/building society loan

A

+ Large sums

-Detailed financial information for approval
-Seize assets upon failing to pay back

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5
Q

Leasing

A

Rent equipment.

+ Short term, cheaper than buying equipment
+ Updated equipment.

-Expensive long term

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6
Q

Mortgages

A

+ Borrow large sums
+ Low interest rate

-Detailed financial information for approval
-Seize property upon failure to pay back

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7
Q

Community sources

A

+ Improve lives of people in the community
+ No paying back

-Only for community projects
-If not used as agreed will be taken back

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8
Q

Grants

A

Offered by government.

+ No paying back
+ For expensive projects

-Can only be spent on a specific project
-If not used as agreed will be taken back

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9
Q

Subsidies

A

+ Brings money into enterprise or reduces tax bill

-Only for specific enterprises
-Enterprise has to meet certain conditions to get it

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10
Q

Crowdfunding

A

Social media.

+ Raise large sums

-Requires abilities with social media

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11
Q

Selling shares

A

+ Raise large sum

-Lose control

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12
Q

Continue growth and expansion

A
  • Personal savings
  • Retained profits
  • Private institutions: micro-finance lender (higher interest than banks)
  • Venture capital: individual or groups (expect to have a say and provide asitance)
  • Issue shares
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