Unit 1: Finance (2)
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- Created on: 04-05-15 10:01
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- Unit 1: Finance
- Help and Support
- The Governemnt
- Private Firms
- Charities
- Sources of Finance
- Bank Loan
- Provided by a bank that will be paid back over a set period.
- Large amounts can be borrowed.
- Interest has to be paid.
- Loan from Friends and Family
- Provided by friends or family where the interest rate and payment period is agreed with them.
- Flexible about re payment and may not have to pay interest.
- May not be able to afford very much.
- Overdrafts
- Allows a business to spend more money than it has in the bank.
- Can be used as many times without asking for permission.
- High interest rates and can be asked to repay at anytime.
- Mortgage
- Long term loan for purchasing a building.
- Repayments every month.
- Variable interest rates which can be expensive.
- Trade Credit
- Suppliers allowed to be paid one or two month after delivery.
- Free finance is available for the period of trade credit.
- Discount for immediate or quick payment may be lost.
- Grant
- Money given to a business by a government organisation or charity.
- The money does not have to be paid back.
- Many business do not qualify for them.
- Bank Loan
- Help and Support
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