Sources of Finance

HideShow resource information
When the owner uses his/her savings to invest in the business
Owners Savings
1 of 12
Profit kept after all expenses and dividends are paid out. The profit can then be put back into the business for expansion of the business
Retain profit
2 of 12
When suppliers give time to pay for supplies and stoke. This is usually within 30 days.
Trade Credit
3 of 12
When an asset is bought over a period of time with repayments made each month until it is paid off and belongs to the company
Hire Purchase
4 of 12
Long term borrowing which you repay the amount borrowed at a fixed period in time, usually used by large organisations
Debentures
5 of 12
They invest in small, risky businesses e.g. a new business or existing businesses which need investment
Venture Capitl
6 of 12
A share in the business is old to an individual or another business. This money is then used to purchase new assets or to expand. The business then turns from a Ltd to a plc and shares can be traded on the stock market
Ordinary Share Capital
7 of 12
When a business sells off their fixed and current assets which is no longer needed for the business to make a profit
Sales of Assets
8 of 12
The bank allows a business to go 'overdrawn' up to a certain amount. The business only pays interest on the amount overdrawn. The interest paid is usually higher than a bank loan. It is usually used to pay small bills and expenses
Overdraft
9 of 12
When an asset is used by a business but is never owned by the business. The business pays a monthly amount to use the assets and in return they get access to the latest equipment e.g. cars or computer equipment
Leasing
10 of 12
An amount of money is borrowed from the bank and then repaid with interest over a set period of time.
Bank Loan
11 of 12
This is a long term loan (usually over 25 years) provided by a bank in order to buy a property
Mortgage
12 of 12

Other cards in this set

Card 2

Front

Profit kept after all expenses and dividends are paid out. The profit can then be put back into the business for expansion of the business

Back

Retain profit

Card 3

Front

When suppliers give time to pay for supplies and stoke. This is usually within 30 days.

Back

Preview of the front of card 3

Card 4

Front

When an asset is bought over a period of time with repayments made each month until it is paid off and belongs to the company

Back

Preview of the front of card 4

Card 5

Front

Long term borrowing which you repay the amount borrowed at a fixed period in time, usually used by large organisations

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Business Studies & Economics resources:

See all Business Studies & Economics resources »See all Unit 1 resources »