Theme 2: Sources of Finance

Retained Profit

The portion of a company's profits that is not distributed as dividends but kept for future use.

Sale of assets

Process of selling resources of value owned by a business to free up capital.

Owner’s capital

Personal assets of the business owner used as a source of finance.

Overdrafts

Agreement with a bank allowing businesses to withdraw more money than available in their account.

Trade Credit

Short-term financing from suppliers allowing businesses to buy now and pay later.

Grants

Money provided by the government to businesses without the need for repayment.

Leasing

Renting equipment or machinery instead of purchasing outright.

Bank loans

Fixed-amount loans from banks used to finance long-term assets.

Venture capital

Private equity financing provided to startups with high growth potential.

Share capital

Money invested in a company by shareholders to access large amounts of capital.

Crowdfunding

Collective effort of individuals pooling small amounts of capital to finance a business venture.