5.2 Flashcards
Crowdfunding (disadvantages)
interest will be needed to pay loans
takes time and effort
crowdfunding (advantages)
no security is needed
a lot of money can be raised
crowdfunding
money is raised from sponsors
new and established businesses
share issue (disadvantages)
dividends have to be paid
shareholders are entitled in a say
share issue (advantages)
money does not need to be paid back
no interest is payable
can be raised from many investors
share issue
new shares are sold
investors can earn an ‘income’
new and established businesses
Trade Credit (disadvantages)
interest is charged
goods must be paid
trade credit (advantages)
period of credit is usually interest free
helps businesses with a temporary shortage
trade credit
does not need to pay the supplier for goods
new and established businesses
disadvantages (sale of assets)
interest is charged daily
can also be expensive
advantages (sale of assets)
businesses can continue trading
size of the overdraft varies monthly
sale of assets
fixed asset
established businesses only
retained profit (advantages)
only available to businesses that have made profits
retained profits (advantages)
no interest has to be paid
no cost to raise the finance
no need to repay the money
retained profit
established businesses
used for buying, expansion, or capital equipment
a fixed asset
