1.3.4 Business Sources of Finance Part 1

Question 1

Short-Term Sources of Finance

Answer 1

-Trade Credit
-Overdrafts

Question 2

Long-Term Sources of Finance

Answer 2

-Loans
-Share Capital
-Personal Savings
-Retained Profit
-Venture Capital
-Crowd Funding
-Government Grant

Question 3

Internal Sources of Finance

Answer 3

-Personal Savings
-Retained profit

Question 4

External Sources of Finance

Answer 4

-Loans
-Share Capital
-Trade Credit
-Overdrafts
-Venture Capital
-Crowd Funding
-Government Grant

Question 5

Trade Credit

Answer 5

Given a certain amount of time to pay off debts to suppliers

Question 6

Overdrafts

Answer 6

Take more money out of its bank account than it has paid onto it

Question 7

Loan

Answer 7

Given money from bank. After the debt is due, interest has to be paid

Question 8

Share Capital

Answer 8

Individuals buy shares in the business

Question 9

Personal Savings

Answer 9

A business owner uses some of their own money into the business

Question 10

Retained Profit

Answer 10

Profits that the owners have decided put back into the business after they have paid dividends

Question 11

Venture Capital

Answer 11

Investors give money into the business for a share and give valuable business experience e.g Dragons Den

Question 12

Crowd Funding

Answer 12

A large number of people contribute money towards starting up a business or funding a business idea

Question 13

Government Grant

Answer 13

Government give money to the business to pay off debts or expand. You aren’t expected to pay back