Sources of finance (OCR GCSE Business): Flashcards
📚Flashcards
Practise the cards
15 cards from this deck
ShowHide
Practise the cards
15 cards from this deck
Owners' capital definition
Owners' capital definition
Personal savings used to finance the business
Owners' capital: interest payments?
Owners' capital: interest payments?
No interest must be paid
Retained profit definition
Retained profit definition
Re-investing historical profits into business
Retained profit available to start-ups?
Retained profit available to start-ups?
No, not available to start-ups
Sale of assets definition
Sale of assets definition
Selling surplus assets to raise finance
Sale of assets: usage limit?
Sale of assets: usage limit?
Can only be used finite number of times
Overdraft definition
Overdraft definition
Withdrawing more cash from bank than owned
Overdraft reliability issue?
Overdraft reliability issue?
Bank can ask for money back at any time
Trade credit definition
Trade credit definition
Suppliers give supplies & let business pay later
Bank loan definition
Bank loan definition
Borrow money, repay with interest over time
Bank loan: risk if no repayment?
Bank loan: risk if no repayment?
Potential to lose assets
Share issue definition
Share issue definition
Money invested by shareholders for equity
Share issue: control disadvantage?
Share issue: control disadvantage?
Shares given up, lose some decision-making power
Crowdfunding definition
Crowdfunding definition
Raising finance from large number of people
Short-term finance duration?
Short-term finance duration?
Up to 1 year