Unit 27 - External Finance Flashcards
Def: authorised share capital
The maximum amount that can legally be raised
Def: bank overdraft
A business spending more money than in its account
Def: capital gain
Profit made from selling a share for more than it was bought
Def: crowd funding
Where a large number of individuals invest in a business or project on the internet
Def: debenture
A long term loan to a business
Def: equities
Another name for an ordinary share
Def: external finance
Money raised from outside the business
Def: issued shared capital
Amount of shared capital arising from the sales of shares
Def: lease
A contract to acquire the use of resources such as property or equipment
Def: peer to peer lending
Individuals lend to other without prior knowledge of them
Def: permanent capital
Share capital that is never repaid by the company
Def: secured loan
A loan where lender requires security eg property
Def: share capital
Money introduced to a company through sale of shares
Def: unsecured loans
Where lender has no protection if borrower fails
Def: venture capitalism
Providers of funds for small - medium companies that may be considered to risky for other investors
Kinds of external finance
Family and friends
Banks
Peer to peer lending
Business angels
Crowd funding
Other businesses
Methods of finance
Loans - bank loans, mortgages, debenture
Share capital
Venture capital
Bank overdraft
Leasing
Grants
