unit 3 topic 14

Question 1

internal sources of finance

Answer 1

money available to fund expenditure within the business

Question 2

retained profit

Answer 2

money kept in business to fund future expenditure

Question 3

external sources of finance

Answer 3

money kept in business - funds future expenditure

Question 4

sale of assets

Answer 4

selling item of value - receive cash injection

Question 5

net current assets

Answer 5

shows money available in business - funds day to day expenditure

Question 6

loans

Answer 6

money borrowed from finance institution - normally for set period of time or specific purpose

Question 7

owners capital

Answer 7

money invested in business from owners personal savings

Question 8

crowd funding

Answer 8

attracting investment from large number of speculative investors - many may invest relatively small amounts

Question 9

mortgages

Answer 9

long term loans - secured against specific asset

Question 10

venture capital

Answer 10

investment from experience entrpaneaur in return for stake in the business

Question 11

debt factoring

Answer 11

selling the debts of a business to third party in order to receive quick cash injection

Question 12

hire purchase

Answer 12

paying to use asset in instalments - spread cost over time

Question 13

leasing

Answer 13

paying to use asset in installments - the ownership of asset remains with the supplier throughout the lease agreement

Question 14

trade credit

Answer 14

period of time - allow customer to buy now and pay later

Question 15

grants

Answer 15

lump sum provided to a business by government or another organisation to be used for specific purpose

Question 16

donations

Answer 16

sums of money given voluntarily to a charity or social enterprise

Question 17

peer to peer landing

Answer 17

involves one business lending money to another business person in return for interest payments

Question 18

invoice discounting

Answer 18

reductions offered to customer - making product or service cheaper - usually applied as percentage of total value