Theme 2 Key Terms Flashcards
Capital
The money provided by the owners in a business
Capital Expenditure
Spending on business resources that can be used repeatedly over a period of time
Internal Finance
Money generated by the business or its current owners
Retained Profit
Profit after tax that is “ploughed back” into the business
Revenue Expenditure
Spending on business resources that have already been consumed or will be shortly
Sale and Leaseback
the practice of selling assets, property or machinery, and leasing them back from the buyer
Authorised Share Capital
The maximum amount that can be legally raised
Bank Overdraft
An agreement between a business an bank that means a business can spend more money than it has in its account.
Capital Gain
Profit made from selling a share for more than it was bought
Crowd Funding
When a large number of individuals invest in a business or project on the internet, avoiding the use of the bank
Debenture
A long- term loan to a business
Equities
Another name for an ordinary share
External Finance
Money raised from outside the business
Issued Share Capital
Amount of current share capital arising from the sale of shares
Lease
A contract used to acquire the use of resources such as property or equipment
Peer to Peer Lending
Where individuals lend to other individuals without prior knowledge of them, on the internet.
Permanent Capital
Share capital that is never repaid by the company
Secured Loans
A loan where the lender requires security, such as property, in case the borrower defaults
Shared Capital
Money introduced into the business via sale of shares
Unsecured Loans
Where the lender has no protection if the borrower cannot pay back money owed
Venture Capitalism
Providers of funds for small or medium sized companies that may be considered too risky for other investors
