sources of finance - D Flashcards
(16 cards)
retained profit - internal
profit kept in the business to fund future expenditure
net current assets - internal
current assets minus current liabilities show the money available to spend on day to day expenses
sale of assets - internal
selling an item of worth in order to achieve immediate cash injection
owner’s capital - external
money invested into the business from the owners personal savings
loans - external
money borrowed from a financial institution
crowd-funding - external
involves attracting investments from a large number of speculative investors
mortgages - external
these are long term loans, that are secured against an asset
venture capital - external
investment for an experienced entrepreneur in return for a stake in the business
debt factoring - external
selling on a business’s debts to a third party in order to receive the cash quickly, the factor company pays the business a % of the money owed and takes the responsibility of chasing debts that need to be repaid
hire purchase - external
involves paying to use an asset in installments to use it over it’s useful life, owned by seller until fully repaid
leasing - external
involves paying to use an asset in installments over its useful life and not owned until fully paid off
trade credit - external
period of time offered by suppliers for a delay in paying for the buyer
grants - external
lump sum provided to the business provided by the government or another organization to fund a specific purpose
donations - external
sums of money voluntarily to a charity or social enterprise
peer to peer lending - external
involves one business person lending another business person money in return for interest payments
invoice discounting - external
reductions offered to customers making a product or service cheaper often applied as percentage
