External sources of finance
- Created by: megangore
- Created on: 30-03-16 16:44
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- External sources of finance
- Overdraft
- the bank allows the business to draw more money from their bank account than they actually have
- trade credit
- items are bought from supplies on a "buy now pay later" basis. usually 30 or 60 days
- leasing
- used to obtain new equipment. the business rents the item from its owner
- bank loan
- an amount of money is borrowed from the bank, then repaid with interest over a set period of time
- shares
- a share in the business is sold to an individual. this money is then used to purchase new assets
- mortgage
- long term loan provided by a bank in order to buy a property
- grant
- money given to the business by the government used to help finance new projects
- hire purchase
- an item is bought on finance, repayments are made each month until the final payment when the item becomes the property of the firm
- venture capitalists
- these invest in small, risky business e.g. dragons den
- Overdraft
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