Theme 2 keywords Flashcards

1
Q

source of finance

A

Places from which a business may gain finance

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2
Q

Owners capital

A

Personal savings or share capital raised - entrepreneur may decide to invest in the share capital of the company

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3
Q

Retained profit

A

Any profit left in the business after the cost of sales, fixed overheads, tax and financing costs have been paid. Cash generated when trading has begun

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4
Q

Collateral

A

Something of value that is used a security when a loan is offered

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5
Q

Peer to peer lending

A

Websites that match up businesses wanting to borrow with investors who are looking for projects

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6
Q

Business Angels

A

Individuals who invest in the early stages of a riskier business and take an equity share in return for providing finance, advice and guidance

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7
Q

Crowdfunding

A

When many small investors fund a project, usually through a website (crowdfrunder.com)

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8
Q

Share Capital

A

Finance raised from selling shares

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9
Q

Venture Capital

A

Provision of finance from professional investors in return for equity usually or could be loans, riskier projects are often funded this way

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10
Q

Overdraft

A

A facility provided by a bank where depositors can go into a negative balance in the bank account

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11
Q

Leasing

A

When an asset is rented rather then purchased - sign a rental contract to pay a rental fee to the owner

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12
Q

Trade Credit

A

When a business is able to buy now and pay later for its supplies

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13
Q

Grants

A

Money given by the government or local council to businesses who are making a positive difference in community

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14
Q

Break even

A

The output when total costs = total revenue

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15
Q

Limited liability

A

When a business is a separate legal entity to its owners, which means that if the business goes bankrupt the owners only lose what they originally invested

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16
Q

Unlimited liability

A

When a business and its owner are the same legal entity, in this case the debts of the business are the debts of the owner and personal property can be sold to pay the debts of the business

17
Q

Liquidation

A

When a business fails and sells its assets off to pay its debts

18
Q

Business plan

A

A document setting out a business idea, how it will be financed and marketing

19
Q

Cash flow forecast

A

A financial statem