finance that the business already has. Soucred from within the business.
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External sources of finance
Sources of finance from outside of the business.
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Dividends
money from shares.
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The tax on company profits
corporation tax.
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Retained profit
money kept back from the profits of a business. This can be used to finance investment in the firm.
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Assets
anything the business owns.
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Share capital
the equity of a business is the value of a business which belongs to its owners.
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Shareholders
owners of shares in a business.
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Overdraft
money borrowed from a bank by drawing more money than is actually in a current account. (short term)
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Overdraft limit
the maximum amount of money that a bank allows to be overdrawn.
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Loans
money borrowed from a bank which is payed back (with interest) over a period of time with interest. (long term)
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Bonds
borrowing a lot of money from a variety of institutions including banks, pension funds, insurance companies, and private investors. (long term - between 5 and 25 years)
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Trade credit
when a business (or individual) is given time to pay an invoice for something they have paid (normally around 90 days). (short to medium term)
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Debt factoring
where a business is able o receive cash immediately for the invoice it has issued from a factor, such as a bank, instead of waiting for it to be paid.
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