Sources of finance

Question 1

Overdraft

Answer 1

The base to overspend on a current account up to an agreed sum

Question 2

Trade Credit

Answer 2

Paying suppliers a period of time after the goods or services have been received

Question 3

Personal Savings

Answer 3

When an entrepreneur invest their own money in a business e.g. from personal savings

Question 4

Venture Capital

Answer 4

When an established business provides investment and own resources into another business for percentage equity

Question 5

Share Capital

Answer 5

Selling shares of your business to people called shareholders

Question 6

Loans

Answer 6

A set amount of money provided for a specific purpose, to be repaid with interest, over a set period of time

Question 7

Retained Profit

Answer 7

Profit that is kept within the business for the year to help finance future acivities

Question 8

Crowdfunding

Answer 8

Raising finance from a large number of people each investing different, often small, amounts of money.

Question 9

Internal sources of finance- selling assets

Answer 9

Selling things that are owned by a business

Question 10

External- Loan capital

Answer 10

A set amount of money borrowed for an intended purpose usually to be paid back over a period of time

Question 11

External- stock market flotation

Answer 11

Selling parts of your business to others
the process of converting a private company into a public company by issuing shares available for the public to purchase.