sources of finance (non-equity)

Question 1

3 examples of short term finances

Answer 1

1. bank overdrafts (spending more than accounts balance)
2. trade credit (delay paying suppliers)
3. credit cards (fast but high interest rate)

Question 2

long term sources of finance (3 examples)

Answer 2

1. bank loans (borrowed money repaid over time with interest)
2. leasing (use asset while making payments)
3. mortgages (long term loans for property)

Question 3

2 pros of non equity sources of finance

Answer 3

• access to funds for growth
• keep ownership control (no shareholders)

Question 4

2 cons of non equity sources of finance

Answer 4

• interest and fees
• risk of default and loss of assets