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Business finance (long term finance (Long tern loan (5 years and over to…
Business finance
long term finance
Retained earnings
reinvest profits into the business
free source
Grants
a sum of money given by the government
doesnt have to be paid back
Ordinary share capital
selling shares
business manager must keep 51% to have there say in the business
Long tern loan
5 years and over to be paid back
paid back with added interest
Short term finance
Trade Creditors
Business may buy supplies on credit and pay at a later date
Expenses due
do not have to be paid immediately
examples : tax, electricity and bills
bank overdraft
Permission to withdraw more than whats in the current account.
Paid back with interest
medium tern finance
Medium term loan
laon from a financial institution
interest has to be paid back
leasing
rent an asset such a vehicles
agreement is made to pay an amount of money over a period of
Hire purchase
allows a business to use equipment before paying for them
Only owned when all payments have been paid