2.1.1 Raising Finances

Question 1

3 types of Internal finances

Answer 1

• Owner Capital
  (personal savings)
• Retained profit
• Sale of Assets

Question 2

External Sources of Finance?

Answer 2

• Family and Friends
• Banks
• Peer-to-peer
  funding

Question 3

Methods of External Finance

Answer 3

• Loans
• Share Capital
• Venture Capital

Question 4

Limited Liability?

Answer 4

When a business owner is not personally responsible for the business’ debt

Question 5

Unlimited Liability?

Answer 5

The business owner is personally responsible for the business’ debt

Question 6

Implication of Unlimited Liability?

Answer 6

Personal Financial Risk