External Finance (Edexcel A-Level Business): Flashcards
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Practise the cards
10 cards from this deck
External finance
External finance
Funding obtained from sources outside the business
Why start-ups struggle to get external finance
Why start-ups struggle to get external finance
Lack proven trading record, appear too risky to lenders
Peer-to-peer lending (P2PL)
Peer-to-peer lending (P2PL)
People lend money directly to peers, bypassing banks online
Business angels typical investment amount
Business angels typical investment amount
£10,000 to £100,000 or more
Debenture holder status
Debenture holder status
Creditor of company, not an owner
Why share capital called permanent capital
Why share capital called permanent capital
Not normally redeemed/repaid to shareholders
Key right of ordinary shareholders
Key right of ordinary shareholders
Voting rights in company decisions
Main benefit of preference shares
Main benefit of preference shares
Fixed rate of return, paid before ordinary shareholders
When is bank overdraft interest charged
When is bank overdraft interest charged
Only when account is actually overdrawn
Trade credit typical payment period
Trade credit typical payment period
30 to 90 days