sources of finance Flashcards
sources of finance (11 cards)
what is retained profit?
profit from previous years that is reinvested back into the business
what is a share issue
when companies pass on new shares to new or existing share holders( only available to limited companies)
what is leasing
renting something the business requires and is paid in monthly payments
an advantage and disadvantage of owners investment
advantage- does not need to be repaid
disadvantage- savings may be lost if business is unsuccessful
advantage and disadvantage of retained profit
a- does not need to be repaid
d- can take a long time to build up profit to use
a and d of bank loan
a- arranged quickly
d- interest is paid in addition to loan amount can end up expensive
a and d of bank overdraft
a - arranged quickly
d- expensive to repay as daily interest is charged
a and d of mortgage
a- taken out over a long period of time allowing business to make payments
d- cost of repayments will increase as interest is charged
a and d of government grant
a - finance does not need paid back
d- time consuming to apply for
a and d of share issue
a- finance does not need paid back
d- shareholders need to be paid a dividend each year
a and d of leasing
a- acquired without having to pay large amount of money up front
d- may be more expensive to obtain assets as monthly payments may work out expensive
