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Flashcards in external finance Deck (16)
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1

authorised share capital

the maximum amount that can be legally raised

2

bank overdraft

an agreement between a business and a bank, that means a business can spend more money than it has in its account (going overdrawn)
the overdraft limit is agreed and interest is only charged when the business goes overdrawn

3

capital gain

the profit made from selling a share for more than it was bought

4

crowd funding

where a large number of individuals (the crowd) invest in a business or project on the internet, avoiding the use of bank

5

lease

a contract to acquire the use of resources such as property or equipment

6

peer-to-peer lending (P2PL)

where individuals lend to other individuals without prior knowledge of them, on the internet

7

debenture

a long term loan to a business

8

equities

another name for ordinary share

9

ordinary share

a share entitling its holder to dividends

10

external finance

money raised from outside the business

11

issued share capital

amount of current share capital arising from the sale of shares

12

permanent capital

share capital that is never repaid by the company

13

secured loans

a loan where the lender requires security, such as property, to provide protection in case the borrower defaults - failure to fulfil an obligation (repaying the loan)

14

share capital

the money invested in a company by the shareholders, it is a long-term source of finance

15

unsecured loans

where the lender has no protection if the borrower fails to pay back the money they owe

16

venture capitalism

providers of funds for small or medium sized companies that may be considered too risky for other investors