Sources of Finance (Long-term sources of Finance (Grants (A sum of money…
Sources of Finance
Long-term sources of Finance
A sum of money given out by the government to people who want to start or expand a business. This money does not have to be repaid
When a business is finances using its profits
Short-term Sources of Finance
Buying supplies on credit and paying for them at an agreed later date
Some expenses do not have to be paid for immediately. This money can be placed in a bank account to earn interest
Permission from the bank to withdraw more money from its current account than is in the account . The business can withdraw up to an agreed limit
Medium-term Sources of Finance
This allows a business to rent as asset without ever owning it. The business enters an agreement with a leasing company to pay an agreed amount over a period of time to use the asset.
Allows a business to use an asset immediately and pay for it in installments. The business only owns the asset when the last installment is paid. The deal involves three parties: the buyer, the seller and the finance company.
A loan from a financial institution that is taken out over a period of one to five years. The loan is paid back in installments plus interest. The repayments can be tailored to suit the needs of a business
Once-off long term spending for a business
The regular or everyday expenditure of keeping the business running