The finances of the business are treated as inseparable from the finances of the business owners(s) (If the business goes bankrupt so does the owner)
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What is limited liability?
Debts of the business stay with the business
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How are unlimited liability businesses like a sole trade or partnership financed?
Owners' capital, bank finance, leasing, trade credit
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How are limited liability businesses, both private and public, able to raise fiance?
Share capital, bank finance, angel or venture capital investment, peer-to-peer or crowdfunding, leasing and trade credit
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What is the relevance of a business plan in obtaining finance?
Should be persuasive to an outside investor, it should explain what makes the business special and what it hopes to achieve, help outsiders understand the risks and rewards
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What are the limitations of cash flow forecasts?
Only as good as the data put in, risk giving certainty where none exists, vital to allow contingencies
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Other cards in this set
Card 2
Front
What are examples of external sources of finance?
Back
Family and friends, banks, peer-to-peer funding, business angels, crowd funding, other businesses
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