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Flashcards in Sources of Finance Deck (11)
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1

Retained Profit

Is the profit kept in the company rather than paid out to shareholders as a dividend. The Most important long-term source of finance for a business.

2

Bank Loan

Is the most common form of loan capital for a business. A bank loan provides medium or long-term finance. The bank sets the fixed period over which the loan provided, the rate of interest and the timing and amount of repayments.

3

Factoring

Is a financial transaction and a type of debtor finance in which a business sells its accounts receivable to a third party at a discount.

4

Sale of assets

An asset sale is a non recourse cash sale of assets from a bank or government agency to a third party.

5

Overdraft

A deficit in a bank account caused by drawing more money than the account holds.

6

Trade Credit

An arrangement to buy goods or services on account, that is, without making immediate cash payment.

7

Hire Purchase

A system by which ome pay for a thing in regular instalment while having the use of it

8

Leasing

Written or implied contract by which an owner of a specific asset grants a second party the right to its exclussive possesion.

9

Sales of shares

The portiom of a companies revenue that is allocated to each share of common stock.

10

Sale and Leaseback

Is an arrangement where the seller of an asset leases back from the same asset from the purchaser.

11

Government grant

Is a financial award given by the government which helps the decrease in population in unemployment to a business which helps it.