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 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?
Government financial support for a business
What is a government grant?
Selling machinery, computers or things and organization owns like land or buildings to raise finance capital.
What are sale of assets?
Long term loans issues by a business. However, holders to 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?
A financial service that allows businesses to raise funds based on the value of their debtors. Agencies offer to purchase outstanding debt at a discount.
What is debt factoring?
Financial gifts from individuals to a business
What are charities?
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
What is capital expenditure?
High risk capital invested by a firm usually at the start of a business idea. These firms seek to invest in small to medium sized businesses with potential of earning high profits.
What is venture capital?
A contract where a business can pay for items in installments, perhaps over 12 or 24 months. Interest is charged and the lender can repossess the asset if the customer misses payments.
What is a hire purchase?
The main source of finance for limited liability companies. Involves selling the shares of the company to investors
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 a product with an option to buy at the end of the contractual period(often used to purchase cars)
What is a lease?
Private, wealth investors who invest in businesses with high growth potential.
Who are business angels?
A long term source of finance for purchasing land or buildings(often a house).
What is a mortgage?
Capital obtained through commercial lenders such as banks. They tend to be 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 between 1-5 years in duration. May include leasing and hire purchases
What is medium term finance.