Sources of finance Flashcards
(15 cards)
Source of finance for start up
Grant
Share capital
Loan
Source of finance for growth
Retained profit
Share capital
Crowd funding
Savings
Loan
Lease
Source of finance for working capital
Overdraft
De-stock
Loan (short)
Debt factoring
Sell asset
Pros of retained profit
No interest
Cons of retained profit
Shareholders want dividends
Pro and Con of selling assets
Free up value in unwanted assets
Lose benefit of the asset
Pro and Con of Overdrafts
Flexible
But Interest
Pro and Con Debt factoring
Immediate cash
Customer lose faith in business
Pro and Con Bank loan
Negotiate with bank to meet business requirements
Interest
Pro and Con Venture capital
Brings expertise
Lose some control of business
Pro and Con Venture capital
b
Pro and Con Share capital
Large amount of capital
No interest
What is Overdrafts
When a bank allows take out more money than in account
What is debt factoring
where they sell debt to a third party facotr
What is Venture capital
Capital invested at an early stage in return for equity in the business
