start-up capital
the capital needed by an entrepreneur to set up a business.
working capital
the capital needed to pay for raw materials, day-to-day running costs and credit offered to customers.
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start-up capital
the capital needed by an entrepreneur to set up a business.
working capital
the capital needed to pay for raw materials, day-to-day running costs and credit offered to customers.
short-term finance
money required for short periods of time of up to one year.
long-term finance
money required for more than one year.
profit
revenue - costs
liquidity
the ability of a business to pay its short term debts.
administration
when administrators manage a business that is unable to pay its debts with the intention of selling it as a going concern.
bankruptcy
the legal procedure for liquidating a business which cannot fully pay its debts out of its current assets.
liquidation
when a business ceases trading and its assets are sold for cash to pay suppliers and other creditors.
current assets
assets that either are cash or likely to be turned into cash within 12 months
current liabilities
debts that usually have to be paid within one year
capital expenditure
the purchase of non-current assets that are expected to last for more than one year.
revenue expenditure
spending on all costs and assets other than non-current assets.
retained earnings
profit after tax retained in a company rather than paid out to shareholders as dividends.
internal sources
raising finance form the business’s own assets or from profits left in the business.
external sources
raising finance from sources outside the business.
non-current assets
assets kept and used by the business for more than one year.
overdraft
a credit that a bank agrees can be borrowed by a business up to an agreed limit as and when required.
factoring
selling of claims over trade receivables to a specialist organisation in exchange for immediate liquidity.
hire purchase
a company purchases an asset and agrees to pay fixed repayments over an agreed time period. the asset belongs to the purchasing company once the final payment has been made.
leasing
obtaining the use of an asset and paying a leasing charge over a fixed period, avoiding the need to raise long-term capital to buy the asset. the asset is owned by the leasing company.
long-term loans
debentures
share capital
business mortgages
venture capital