Sources of Finance Flashcards
What is a bank overdraft?
short term: an agreement with the bank to overspend on an account.
What is Trade Credit?
short term: buy now pay later agreement
What is debt factoring?
short term: a business looks to sell off their debt to gain finance.
What is the sale of an asset?
short term: when a business sells off items they own
what is a grant?
short term: a payment from local/central government
what is retained profits?
short term: profits kept back from previous years
what is a bank loan?
medium term: finance offered by a bank which must be paid back with interest over a set time
what is leasing?
medium term: rent vehicles or equipment from a leasing company
what is hire purchase?
medium term: where a deposit is made on an asset and the rest is paid back in instalments
what is share issue?
long term: this is where a limited company offers equity to investors
what is debentures?
long term: it is a medium/long term loan used by large companies to borrow money at a fixed rate of interest
what is owners saving?
long term: the owners own money
what is venture capital?
long term: finance that investors provide to start up companies often provided when banks decide that a loan is too risky
