Business Finance AS Business

Flashcards covering sources of business finance, including internal and external options, as well as relevant vocabulary.

Working Capital

Money needed to finance the day-to-day running of the business.

Investment Capital

Helps the business grow.

Capital Expenditure

Money to invest in fixed assets such as buildings and equipment.

Reinvested Profits

Profits that are put back into the business for growth or other purposes.

Bank Loan

Borrowing a fixed amount for a fixed period of time.

Overdraft

The facility to withdraw more from an account than is in the bank account, resulting in a negative balance.

Trade Credit

Businesses buy items such as fuel and raw material and pay for them at a later date.

Factoring

Method of turning invoices into cash.

Leasing

The company gains use of a productive asset, without ever owning it.

Hire Purchase

Method of gaining the use of capital goods, whilst paying a monthly fee.

Commercial Mortgages

A loan where property is used as security.

Sale and Leaseback

Business selling assets to a finance company and then leasing the asset back.

Share Capital

A long-term method of providing funds for growth by selling shares.

Business Angels/ Venture Capitalists

Professional investors who can invest large amounts of capital into small- and medium-sized businesses.

Government Grants/ Government Assistance

Finance offered by local and central government to business start-up schemes.