Finance Flashcards
Describe what the short term trade credit is.
This is when a business buys goods now and pays for them at a later date.
Describe what the short term bank overdraft is.
This is when the bank allows you to withdraw more money than you have for an agreed period of time. Usually interest is added on.
Describe what the short term retained profit is.
This is when the business owners put any profit made back into the business.
Describe the medium term bank loan.
This is money given by the bank. Needs to be paid back over a fixed period of time with interest added.
Describe the medusoid term loan from family and friends.
This is money given by family and friends. Usually they do not ask you to pay any interest on it.
Describe the medium term leasing.
This is when you pay for using an item over a period of time- but you NEVER own it.
Describe the medium term hire purchase.
An item is purchased and you pay for it in installments. You don’t own it until you pay the final installment.
Describe the long term mortgage.
This is a long term loan usually over 25-30 years and is used to purchase property. It is repaid with interest added.
Describe the long term venture capital.
Money invested in a business in return for a share of the business.
Describe the long term owners savings.
This is when the owners own money is invested into the business.
