sources of finance Flashcards Preview

Business Paper 2 > sources of finance > Flashcards

Flashcards in sources of finance Deck (13):
1

retained profit

profit is kept in the business and used to purchase things that will benefit the business

2

sales of assets

where a business sells something they already own

3

Mortgage

long term method of borrowing money on a building- needs high level security and must be paid back with interest

4

overdraft

allow bank account to go into minus figures

5

grants

money awarded by governments for specific purposes

6

owner investment

existing owners of the business may invest money into it

7

Cash in bank

money owned by a business and built up overtime

8

share issue

used by limited companies to raise finance in return for a share of the business

9

Bank loan

an amount of money borrowed from a bank which a business will have to pay back overtime with interest

10

leasing (renting)

a business pays monthly to used certain resources (building/ vans)

11

hire purchase

business pays monthly to use certain resources before a final payment is made- where the business is able to keep the resource

12

taking a new partner

partners can obtain additional finance by selling parts of the business to a new partner

13

trade credit

when a business doesn't pay their supplier back immediately and instead pays for goods within 30, 60 or 90 days