Studied by 1 personHire purchase
________: asset is sold to a company which agrees to make fixed repayments over an agreed time period; the asset belongs to the company.
Subsidies
________: financial benefits given by the government to a business to reduce costs and encourage increased production.
Debentures
________ (also known as loan stock or corporate bonds): bonds issued by companies to raise debt finance, often with a fixed rate of interest.
Internal finance
________: raised from the businesss own assets or from profits left in the business (ploughed- back or retained profits)
Bank overdrafts
________= (bank agrees to a business borrowing up to an agreed limit as and when required)
Venture capital
________: risk capital invested in business start ups or expanding small businesses, which have good profit potential, but do not find it easy to gain finance from other sources.
External finance
________: raised from sources outside the business.
Start-up capital
capital needed by an entrepreneur to set a up a business
Working capital
capital needed to pay for raw materials, day-to-day running costs and credit offered to customers
Working capital = Current assets
Current liabilities
Internal finance
raised from the businesss own assets or from profits left in the business (ploughed-back or retained profits)
External finance
raised from sources outside the business
Retained profit
profit left after all deductions, including dividends, have been made; this is "ploughed back" into the company as a source of finance
Debt factoring
selling of claims over debtors to a debt factor in exchange for immediate liquidity; only a proportion of the value of the debts will be received as cash
Hire purchase
asset is sold to a company which agrees to make fixed repayments over an agreed time period; the asset belongs to the company
Leasing
obtaining the use of equipment or vehicles and paying a rental or leasing charge over a fixed period
Long-term loans from banks
loans that do not have to be repaid for at least one year
Debentures (also known as loan stock or corporate bonds)
bonds issued by companies to raise debt finance, often with a fixed rate of interest
Venture capital
risk capital invested in business start ups or expanding small businesses, which have good profit potential, but do not find it easy to gain finance from other sources
Business angels
individual investors who put in their own money in a variety of businesses and are seeking a better return than they would obtain from conventional investments
Subsidies
financial benefits given by the government to a business to reduce costs and encourage increased production
Start-up capital
Capital needed by an entrepreneur to set a up a business
Working capital
Capital needed to pay for raw materials, day-to-day running costs and credit offered to customers
Internal finance
Raised from the business's own assets or from profits left in the business (ploughed-back or retained profits)
External finance
Raised from sources outside the business
Retained profit
Profit left after all deductions, including dividends, have been made; this is "ploughed back" into the company as a source of finance
Overdrafts
Bank agrees to a business borrowing up to an agreed limit as and when required)
Debt factoring
Selling of claims over debtors to a debt factor in exchange for immediate liquidity; only a proportion of the value of the debts will be received as cash
Hire purchase
Asset is sold to a company which agrees to make fixed repayments over an agreed time period; the asset belongs to the company
Leasing
Obtaining the use of equipment or vehicles and paying a rental or leasing charge over a fixed period. This avoids the need for the business to raise long-term capital to buy the asset; ownership remains with the leasing company
Long-term loans from banks
Loans that do not have to be repaid for at least one year
Debentures (also known as loan stock or corporate bonds)
Bonds issued by companies to raise debt finance, often with a fixed rate of interest
Venture capital
Risk capital invested in business start ups or expanding small businesses, which have good profit potential, but do not find it easy to gain finance from other sources
Business angels
Individual investors who put in their own money in a variety of businesses and are seeking a better return than they would obtain from conventional investments
Subsidies
Financial benefits given by the government to a business to reduce costs and encourage increased production
Note 
Flashcard (35)