Sources of finance :

What are the two short-term sources of finance?

Overdraft and trade credit

Which of these is a short-term source of finance?

What are the five different long-term sources of finance?

• personal savings

• Venture capital

• Crowd funding

• Loans

• Share capital

What is an overdraft?

A very expensive source of finance, with very high charges and interest rates

What is trade credit?

Saddle gives buyer 30, 60 or 90 days to pay, which gives the buyer time to sell goods in their own shop before paying the seller back

What is a loan?

They are issued by the bank, have interest which will have to be paid back to the bank, the bank may require security to give you a loan

What is crowd funding?

Away for companies and individuals to raise money from a large group of investors

What are the restrictions in crowd funding?

Who is allowed to fund a new business and how much they are allowed to contribute

What is venture capital?

Specialise in financing high risk start ups where there’s lots of potential of big return on their investment, they take shares of the business and give advice

What is personal savings?

An account that a business owner may have to help finance a business further

What is share capital?

When limited companies can issue shares in return for money to raise funds to grow/expand, for example a public limited company can issue shares to anyone while a private limited company can only issue shares to family and friends