Chapter 18: Sources Of Finance

Question 1

Internal source of finance

Answer 1

Exits within the business

Question 2

External source of finance

Answer 2

Injection of funds into a business from individuals or other businesses

Question 3

short- term finance

Answer 3

Finance needed for a limited time

Normally less than 1 year

Question 4

Long-term finance

Answer 4

Sources of finance that are needed over a longer period time

Over 1 year

Question 5

Bank loan

Answer 5

Money provided to a business for a stated purpose

In return for interest charges

Question 6

Overdraft

Answer 6

When a business is allowed to spend more than it holds in its bank account

Up to an agreed limit

Question 7

Venture capital

Answer 7

Funds advanced to businesses thought to be relatively high risk

In form of share and loan capital

Question 8

Share capital

Answer 8

Finance invested into a company as a result of the sale of shares in the business

Question 9

Crowdfunding

Answer 9

Raising many small amounts of money from a large amount of people

Via internet