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Flashcards in Sources of Finance Deck (11)
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1
Q

Retained Profit

A

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
Q

Bank Loan

A

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
Q

Factoring

A

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
Q

Sale of assets

A

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

5
Q

Overdraft

A

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

6
Q

Trade Credit

A

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

7
Q

Hire Purchase

A

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

8
Q

Leasing

A

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

9
Q

Sales of shares

A

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

10
Q

Sale and Leaseback

A

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

11
Q

Government grant

A

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