FA: business

Finance

Various available money that an organization has to fund its business activities.

capital expenditure

Business spending on non-current asset or capital equipment of a business.

Revenue expenditure

Business spending on everyday and regular operations.

Internal sources of finance

+no help from third party

External source of finance

+usually with a help from third party

Retained profit

An internal source of finance that comes from have a financial surplus, and are used for reinvesting the business.

Asset

Anything that business owns and has a marketable value.

Source of finance

When you get the money from.

Personal funds

Money you earn from yourself.

Share capital (equity capital)

Finance raised through the issuing of shares via a stock exchange.

Initial public offering

Egan a limited liability company sells its share for the first time on a public stock exchange.

Loan capital (debt capital)

Borrowed funds from financial lenders, such as commercial banks.

Overdraft

Banking service that enables to withdraw more money than exits in their account.

Trade credit

Enables to purchase and obtains goods & services but pay them back later.

Crowdfunding

+small number of money from large number of people.

Equity crowdfunding

Sales of a stake in a business to a number of investors in the crowds.

Donation-based crowdfunding

Individuals donate small amount of money either no return of anything’s.

Leasing

Business drawing up the contrast with leading company to use non-current asset from them by an agreed fee.

Microfinance providers

For-profit social enterprises offering a financial services for those without a job or on very low income.

Business angels

Wealthy and successful private individuals who find potential for business venture and put their money.

Private equity firms

Specialist finance companies, who funds in exchange of equity ownership of future profit.

Short-term finance

Sources of finance needed for day-to-day running of business (i.e., revenue expenditure)

Long-term finance

Sources of finance of more than 1 year on balance sheet. (i.e., capital expenditure)

Depending factors of appropriateness in different sources of finance (SPACED)

Size of the business, purpose of funds, amount required, cost, external environment, duration