Internal Finance
This internal source of finance comes from the owner’s own savings.
What are personal funds?
This source of finance involves selling ownership shares in a company.
What is share capital?
Loan capital usually helps fund this type of asset.
What is a non-current asset?
Share capital is also called this type of capital.
What is equity capital?
Leasing allows firms to use assets without doing this.
What is buying the asset?
This internal source is profit reinvested instead of paid to shareholders.
What is retained profit?
This source of finance is money borrowed from banks or lenders.
What is loan capital?
An overdraft is mainly used for this type of finance period.
What is short-term finance?
Issuing more shares causes this problem for owners.
What is diluted control?
A lease is a contract between a lessee and this person or business.
Who is the lessor?
This internal source raises money by selling business property or equipment.
What is sale of assets?
This source lets customers withdraw more than their bank balance.
What is an overdraft?
Trade credit usually gives this benefit if paid within 30–60 days.
What is interest-free credit?
Business angels usually receive this in return for investing.
What is ownership / equity?
Long-term leases often include this option at the end.
What is the purchase option?
An advantage of personal funds is that they do not require this.
What is repayment / interest?
This source allows firms to buy now and pay suppliers later.
What is trade credit?
A disadvantage of loan capital is paying this extra cost.
What is interest?
Business angels often help businesses by providing this besides money.
What is management guidance / expertise?
Leasing is helpful for firms that cannot afford this.
What is buying expensive assets outright?
A major risk of using personal funds is that the owner could lose this if the business fails.
What are personal savings / personal money?
This source raises money from many small public donations online.
What is crowdfunding?
Loans may require this as security against default.
What is collateral / security?
Retained profit can cause dissatisfaction among this group.
Who are shareholders?
Business angels usually invest in businesses with this type of potential.
What is high growth potential?