Sources of finance (AQA GCSE Business): Flashcards
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13 cards from this deck
Internal finance
Internal finance
Money from within the business itself
External finance
External finance
Money from sources outside the business
Main advantage of retained profits
Main advantage of retained profits
No interest payments required
Trade credit
Trade credit
Receiving goods now, paying suppliers 30-90 days later
Key risk of bank overdrafts
Key risk of bank overdrafts
Bank can withdraw facility at any time
Bank loan advantage re: ownership
Bank loan advantage re: ownership
Bank gains no ownership stake in business
Flotation
Flotation
Selling shares on stock market for first time
Key advantage of share financing
Key advantage of share financing
Money raised doesn't need to be repaid
Main benefit of grants
Main benefit of grants
Free money that doesn't require repayment
Hire purchase
Hire purchase
Gradually purchasing items through instalments
Leasing
Leasing
Rental agreement; business never owns the product
Set-up costs
Set-up costs
One-time initial expenses before trading begins
Dividends
Dividends
Profits withdrawn by owners or shareholders