Source of finace

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  • Created by: Ronel.p
  • Created on: 15-04-18 18:30
What are source of finance
where business can obtain money
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what does source of finance assist(3)
business start up/ with operating cost e.g salaries, supplies, elctrcity bills./ expansion costs of a business e.g investing in new technology
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short-term sources of finance definition(1)
are for small amounts of borrowing, which must be repaid within one year
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examples of short term finance(2)
overdraft facility/ trade credit
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Long term finance sources of finance
tend to be for larger amounts of money that are needed for longer periods of timr
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overdraft
when a bank allows a business to withdraw more money than its has in its account and pay it back later
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trade credit
when a business recieves good from supplier immediantly but agrees to pay for them later
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Advantage of trade credit
a business receives payment from customers, before paying suppliers, removing the need to raise its own finance
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disadvantage of trade credit(3)
Not all suppliers offers trade credit; suppliers might charge a higher selling price. New business may not be offered trade credit until financial.
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overdraft advantage(2)
Quick, Convenient flexible; interest paid only on the amount of money borrowed and for the amount of time its is borrowed.
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Disadvantage overdraft
High, variable rates of interest; a bank may not grant the facility and can remove it at any time.
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Other cards in this set

Card 2

Front

what does source of finance assist(3)

Back

business start up/ with operating cost e.g salaries, supplies, elctrcity bills./ expansion costs of a business e.g investing in new technology

Card 3

Front

short-term sources of finance definition(1)

Back

Preview of the front of card 3

Card 4

Front

examples of short term finance(2)

Back

Preview of the front of card 4

Card 5

Front

Long term finance sources of finance

Back

Preview of the front of card 5
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