Sources 1
An internal source of finance more suitable for sole traders and for partnerships. There is no interest to be paid however it is risky as it uses entrepreneurs own money to finance projects.
What are Personal funds?
When a company first offers it's shares for sale on the stock market
What is an IPO (initial public offering)?
A short term source of finance that allows a business to withdraw more money than it has in it's bank account
What is an overdraft?
Involves a business selling a particular fixed asset and immedietely leasing the property back.
What is sale and leaseback?
Selling machinery, computers or things an organization owns like land or buildings to raise finance capital.
What are sale of assets?
Long term loans issues by a business. However, holders do not have ownership rights in the company like shareholders. Though they do receive interest payments even if the business makes a loss.
What are debentures?
The practice of raising finance for a business venture or project by getting small amounts of money from a large number of people, usually through online platforms
What is crowdfunding?
When an existing publically held company raises further finance by selling more of its shares to the public
What is share issue or share placement?
The money organizations have after covering their costs to fund projects and new business opportunities.
What is retained profit?
This is finance spent on purchasing fixed assets used for the business
What is capital expenditure?
A type of finance aimed at entrepreneuers of small businesses, especially females and those on low incomes
What is microfinance?
A highly regulated marketplace where individuals and businesses can buy and/or sell shares in publically traded companies
What is a stock exchange?
The main source of finance for limited liability companies. Involves selling investments in the company privately or publically.
What is share capital?
Finance spent on the daily running of the business
What is revenue expenditure?
A medium term source of finance where customers rent an asset with usually an option to buy at the end of the contractual period
What is a lease?
Private, wealthy individuals who invest in businesses with high growth potential.
Who are business angels?
A long term source of finance for purchasing land or buildings (often real estate).
What is a mortgage?
Capital obtained through commercial lenders such as banks. They tend to be more medium to long term sources of finance.
What is loan capital?
Credit given to organizations where they are allowed to 'buy now, pay later' for products.
What is trade credit?
Finance that is less than 1 year in duration. Used to pay for the daily or routine operations of the business
What is short term finance.