1.3.4 - Sources of Finance Flashcards Preview

GCSE Edexcel - Business definations and equations > 1.3.4 - Sources of Finance > Flashcards

Flashcards in 1.3.4 - Sources of Finance Deck (16)
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1

List exampels of long term finance

-Personal savings of owners
- Venture capital
-Share capital
-Bank loans
-Retained profit
- Crowd funding

2

List examples of short term finance

- Trade credit
- Overdraft

3

Trade Credit:

A credit arrangement that is offered only to businesses by its suppliers

4

Overdraft:

Overdraft: A facility offered by a bank that allows an account holder to borrow money at short notice

5

Cheque:

A written order to a bank to pay an amount of money from an account holder's account to a specified person

6

Venture Capital:

Money to invest in a business is sources from individuals, or groups of people, who wish to invest their own money into new businesses

7

Return on Investment:

Return on Investment: The amount of money that an investor gets back in return for investing in a business

8

Shareholders:

Investors who are part-owners of a company

9

Share Capital:

Money to invest in a business is raised by the business issuing shares that it then sells to those who wish to invest in the company

10

Credit Check:

Credit Check: A check on the financial status of a business or individual to ensure that the business or individual has a reliable credit history and does not have any existing outstanding debts

11

Security:

When the lender asks the borrower to put up an asset, such as a house, or a valuable item owned by the business

12

Asset:

Asset: Any item of value that a business owns, such as its machinery or premises

13

Guarantor:

A named person who guarantees to pay the repayments on a loan should the person who has taken out the loan not be able to make the payments

14

Retained Profit:

Money that a business keeps, rather than paying out to its shareholders

15

Long term finance

Finance exceeding one year.

16

Short term finance

Finance that is not exceeding one year.