Business UNIT 1- Mrs Rees

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  • Created by: Rumnique
  • Created on: 18-04-15 17:50

Internal Sources of Finance

Founder Finance-  Finance that is put into the business by the people who set up the company.

Retained Profits- Profit that is left and reinvested into the business, rather than distributed to the shareholders.

Sales of Assets- Selling of items that the company own, e.g. machinery.

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External Sources of Finance

Bank Loan-  A sum of money provided to a firm or individual by a bank for a sepcific and agreed purpose.

Bank Overdraft- When a bank allows and individual or organisation to overspend its current amount in the bank up to an agreed limit for a stated period of time.

Friends and Family- Money given by family members or friends to help the new start-up business.

Business Angels- Entreprenurial individuals who provide a capital in return for a proportion of the company equity.

Grants- A Financial reward given by a federal, state or local government to an eligable grantee.

Share Capital- The part of capital of a company that comes from the issues of shares.

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Short- Term Sources of Finance

Personal Sources- Money from your own bank or own various sources.

Bank Overdraft-  When a bank allows and individual or organisation to overspend its current amount in the bank up to an agreed limit for a stated period of time.

UP TO 12 MONTHS!

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Medium- Term Sources of Finance

Personal Sources- Money from your own bank or own various sources.

Loan Capital- Money recieved by an organisation in return for the oganisation's agreement to pay intrest and to repay within an agreed time.

Venture Capital- Finance that is provided to small/ medium sized firms that want to grow but are considered risky by other share buyers or lenders (business angels)

BETWEEN 2-5 YEARS!

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Long-Term Sources of Finance

Personal Sources- Money from your own bank or own various sources.

Ordinary Share Capital- Money given to a company by shareholders in return for a share certificate that gives them part ownership of the company and entitles them to a share of the profits.

Loan Capital- Money recieved by an organisation in return for the oganisation's agreement to pay intrest and to repay within an agreed time.

Bank Loan- A sum of money provided to a firm or an individual by a bank for a specific and agreed purpose.

FOR 5+ YEARS!

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