Sources of Finance
- Created by: Sumtimesadness
- Created on: 17-02-14 14:04
View mindmap
- Sources of Finance
- Share captial
- issuing shares gives ownership
- limited liability restricts finance that can be lost
- a dividend doesn't have to be paid if a business cant afford it
- the more shareholders the more skills and expertise
- more shareholders means less direct vision
- in profitable years dividends will need to be paid
- loan capital- bank loan is repaid with interest
- repayments are fixed for a specific, date each month
- interest rates are normally low because of the security provided
- size of the loan can change depending on how much you need
- a small business may only be allowed to borrow a small amount
- its expensive to pay off a loan quicker than agreed
- repayments are fixed for a specific, date each month
- Bank overdraft
- over spend in a bank account at an agrred amount for a specific period of time
- flexible
- useful for temporary cash flow problems
- security isn't usually required
- interest rate is high
- Untitled
- venture capitalist is a professional investor willing to ivest in high risk businesses for a high return
- good for businesses that cant get finance anywhere else
- want a sigfinicant share in the business and high interest payments
- business angel are wealthly entreprenue willing to invest into a small high risk business expect a high reutnrn
- Share captial
Similar Business Studies resources:
Teacher recommended
Comments
No comments have yet been made