Sources of Finance

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Long Term Finance
Sources of money for businesses that are borrowed or invested typically for more than a year
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Short Term Finance
Sources of money for businesses that may have to be repaid either immediately or fairly quickly, such as an overdraft, usually within a year
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Overdraft Facilities
Borrowing money from a bank by drawing more money than is actually in a current account. Interest is charged on the amount overdrawn
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Loan
Borrowing a sum of money which has to be repaid with interest over a period of time, such as 1-5 years
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Share
A part ownership in a business. For example, a shareholder owning 25% of the shares of a business owns a quarter of the business
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Personal Savings
Money that has been set aside and not spent by individuals and households
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Share capital
The monetary value of a company which belongs to its shareholders. For example, f five people each interest £10,000 into a business, the share capital will be £50,000
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Shareholders
The owners of the company
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Venture capitalist
An individual or company which buys shares in what they hope will be a fast growing company with a long-term view of selling the shares at a profit
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Dividend
A share of the profits of a company received by shareholders who own shares
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Retained Profit
Profit which is kept back in the business and used to pay for investment in the business
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Security
assets owned by a business which are used to guarantee repayments of a loan; if the business fails to pay off the loan, the lender can sell what has been offered as security
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Mortgage
A loan where property is used as security
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Other cards in this set

Card 2

Front

Sources of money for businesses that may have to be repaid either immediately or fairly quickly, such as an overdraft, usually within a year

Back

Short Term Finance

Card 3

Front

Borrowing money from a bank by drawing more money than is actually in a current account. Interest is charged on the amount overdrawn

Back

Preview of the back of card 3

Card 4

Front

Borrowing a sum of money which has to be repaid with interest over a period of time, such as 1-5 years

Back

Preview of the back of card 4

Card 5

Front

A part ownership in a business. For example, a shareholder owning 25% of the shares of a business owns a quarter of the business

Back

Preview of the back of card 5
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