2.1.2 External Finance Flashcards
What are external sources of finance?
Family and friends Banks Peer-to-Peer Business angles Crowd funding Other businesses
What are external METHODS of finance?
Loans Share capital Venture capital Overdrafts Leasing Trade credit Grants
What are benefits of sourcing from family and friends?
Replayment terms might be flexible.
What are some drawbacks of external finance via family and friends?
Investments may be limited
What are some benefits of external finance from banks?
Banks have departments and employees that can give advise on planning and sourcing finance
What is peer to peer finance?
The practice of individual lending to other individuals.
What are business angels?
Business angles are a source of finance who are wealthy individuals who make personal investments into startups in return for a share of the business.
What is crowdfunding?
External source of finance where you raise money from a number of people often investing
What is sourcing finance from other businesses?
Businesses with a healthy cash balance may look to invest in other businesses
