Theme 2.1 Flashcards
Internal finance
Funds used from within a business
Define owners capital
When an entrepreneur invest their own money into a business
Define retained profit
Profit kept within the business from profit after tax
Define Sale of assets
A method of raising short-term finance by disposing of a business asset in return for cash
External finance
Funds raised from investors outside the business
Give examples of finance coming from the provider
Family and friends Banks Peer to peer funding Business angels Crowdfunding
Give a method of finance on how the finances provided
Loans Share capital Venture capital Listening Overdrafts
Define loans
When a lender provides capital for a period of time with interest
Define share Capital
Money raised from the sale of shares
Define venture Capital
Investment from and established business into another business
Define overdraft
Facility to overspend on a current account up to an agreed sum
Define leasing
Contract that allows renting of assets without owning it
Define trade credit
Arrangement to buy goods and services and pay after an agreed time
Define grants
Fixed amounts of capital provided to business by the government for specific projects
Business plan
A document that describes how an entrepreneur proposes to set up a new business
