Sources of finance
A mind-map of the sources of finance
- Created by: BethanyM
- Created on: 22-05-13 20:43
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- Sources of finance - (external finances are purple and internal are blue)
- Lease- borrowing items, give them back
- Don't pay repairs, no maintenance, up-to-date
- Not yours, monthy fees, ongoing cost
- Hire purchase- Hiring then own when last payment is made.
- Spread payments, get to use it straight away.
- Willl cost more over time than it would to purchase outright, charged interest, can't sell it until all the payments are made.
- Trade Credit- Sells goods and allows 30 days or agreed amount of time to repay.
- Can make money first, use products, convenient , 30 days interest free
- Fines, interest, stop buying if not repaid, easy to overspend.
- Overdraft- Can withdraw on money you don't have
- Flexible, convenient, only pay interest while in it
- Can be easy to overspend, expensive, can be high interest
- Grants- From government, boosts economy, jobs created, providing services
- Don't have to repay, no interest
- Really hard to get, especially as we are in a recession
- Mortgage- Long term money to buy property, around 25-35 years .
- Fixed fate, lower rate interest, paid monthly
- Property can be repossed if you don't keep up with repayments.
- Bank Loan- Amount of money borrowed from a bank. Bank will want proof to give you the loan. Loan for fixed period,1-5 years.
- Money to start up, fixed payments over several years
- Can take assets, have to prove you can repay the amount, interest rates
- New partner- new investor/owner
- Money, new ideas, no interest
- Lose some control over the business
- Owner's investment- Owners own money
- No interest, instant
- Limited funds, no garuntee for return of money
- Sales of assets- selling assets
- Can make space, money on unused items
- Decreases in value as they age, cost of selling
- Share issue- selling shares on the stock market
- You can make large amount of capital
- More owners
- Lease- borrowing items, give them back
- Spread payments, get to use it straight away.
- Money to start up, fixed payments over several years
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