Sources Of Finance IMPORTANT

Question 1

What are examples of internal sources of finance

Answer 1

Retained profit
Net current assets
Sales of assets

Question 2

What are examples of external sources of finance

Answer 2

Owners capital
Loans
Venture capital
Donations

Question 3

What is venture capital?

Answer 3

Money invested into a company with high risk. E.g. a new or expanding business

Question 4

What is owners capital?

Answer 4

Money invested into a business by the owner

Question 5

What is debt factoring

Answer 5

Money given to a company now for payments that a third party owes, this money is then paid back with interest

Question 6

What is a hire purchase

Answer 6

Paying for an asset in installments. The item remains urs once it the instalments are paid

Question 7

What is leasing

Answer 7

Paying to use an asset in instalments over its use lifen

Question 8

What is trade credit

Answer 8

A period of time given by suppliers to pay for goods or services

Question 9

What is invoice discounting

Answer 9

When a business is given a loan to pay for there unpaid bills instead of getting money from customers

Question 10

What are debentures

Answer 10

Money lent to a company that is given back with interest on top