Sources of finance Flashcards
Asset
An item of property owned by a person or company.
Cash flow
The movement of money in and out of the business.
Cost of borrowing
Cost of borrowing is the interest charged on a bank loan.
Credit arrangement
A credit arrangement is a contract made between a business and a supplier. It outlines when payments must be made.
Credit check
A credit check is when a company looks at the financial information held on a business or an individual to determine whether they are creditworthy (eg suitable to lend money to) and reliable.
Crowdfunding
Crowdfunding is raising money from a large number of people who contribute small amounts, usually online.
Dividends
A sum of money paid regularly by a company to its shareholders out of its profits.
Entrepreneur
A calculated risk-taker who sets up a business in return for financial gain.
Founder
A business founder is an individual or group of individuals who create a business.
Guarantor
A person who guarantees a loan or payment. If the person or business taking out the loan does not pay, the guarantor pays instead.
Investment return
The amount of money that is received in return for investing in a business.
Ordinary shares
A share of a company entitling its holder to dividends which vary in amount depending on whether the company has a good or bad year.
Overdraft
An agreement with the bank to overspend on an account.
Permanent capital
Permanent capital is a source of finance that never has to be paid back.
Share capital
The money raised when a business becomes a public limited company by offering shares in the business in return for capital.
