business chapter 15 - sources of finance

finance chapter 2

business angels

extremely wealthy individuals who risk their own money by investing in small to medium sized businesses that have high growth potential

crowdfunding

practice of rasiing finance for.a business venture or project by getting small amounts of money from a large number of people usually through online

external sources of finacne

funds from outside the organisation such as thorugh debt share capital etc

intial public offering

business converting its legal status to a publicly traded company by floating its shares on a stock exchange for the first time

internal sources of finance

funds generated from within the organisation through personal funds retained profits etc

leasing

from of hiring whereby a lesee pays rental income to hire assets from the lessor the legal owner of the assets

loan capital

refers to medium or long term sources of interest bearing finance obtained from commercial lenders like mortages business development etc

long term sources of finance

available for any period of more than 12 months from the accounting periods used for the purchase of fixed assets or to finance the expansion of a a business

mmicrofinance

type of financial service aimed at entrepreneurs of small businesses especially females and those on low income

overdrats

allows a business to spend in excess of the amount in its bank account up to a pre-determined limit most flexible form of finance

personal funds

source of internal finance, refering to use of an entrepreneurs own savings, usually fro small business

retained profit

value of surplus that a business keeps to use within the business after paying corporate taxes on its profits to the goverment and divident payments

sale of assets

selling existing items of value that the business owns scuh as dormat assets

share capital

money raised from selling shares in a limited liability company

share issue

means an existing publicly held company raises further finance by selling more of its shares

short term sources of finance

those available for a perios of less than 1 year used to pay for the daily or routine operations of the business such as overdrafts etc

sources of finance

general term used to refer to where or how businesses obtain their funds such as from personal finds, retained profits

stock exchange

highly regulated marketplace where individuals and businesses can buy and/or sell shares in publicly traded companies

trade credit

allowed a business to postpone payments or to buy now or pay later, the credit provider does not receive any cash from the buyer until a later date