2.1 Raising Finance

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Last updated 10:22 AM on 5/1/26
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11 Terms

1
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Owners capital

Money invested into the business by the owner through personal savings

2
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Why might a business sell unused assets?

To quickly raise cash for expansion or cash-flow problems.

3
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Drawback of selling assets

The asset may be needed later for production or operations.

4
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share capital

selling shares to investors

5
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ADV abd DISADV of share capital

  • adv - no repayment required

  • disadv - shareholders expected returns

6
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venture capital

Investment from specialist investors

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ADV and DISADV of share capital

  • adv - expertise provided

  • disadv - investors may expect high returns

8
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Trade credit

Buy now from suppliers pay later

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business angel

a wealthy individual who invests money in a business

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why may limited liability help raise finance

investors may see the business as more formal - lower personal risk encourages investment

11
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why is cashflow forecast useful when applying for finance

shows expected inflows/outflows and whether the business can repay finance