Sources Of Finance Flashcards
Short term sources
Sale of assets
Overdraft
Trade credit
Long term sources
Sale of assets Taking on a new partner Loan Share issue Crowdfunding
When does a business need finance
Start up capital
Working capital
Growth and expansion
Crowdfunding
Where a large group of people will fund a project through donations, typically through the internet
Loan
A business borrows a sum of money from a bank or other lender
Overdraft
A bank allows a business to spend more money than there is in its current account
Share issue
Money is raised by selling a share in the business
Taking a new partner
Money is raised by inviting someone to become a new partner in the business
Trade credit
Goods are obtained from another business without immediate payment being made
Retained profit
Money is earned by the business but not paid to the owner
Sale of assets
Money is received following the sale of capital items owned by the business
Owner’s capital
The owner or owners use their own savings to provide capital for the business
