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Theme 2.1 (Owners capital (This is the money invested by the owner in the…
Theme 2.1
Owners capital
This is the money invested by the owner in the business, this may have come from their own personal savings.
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Loan collateral
The loan will need to be secured on something worth equivalent value such as premises or a building.
Venture capital
Large amounts of capital invested by private investors usually in return for a proportion of equity or shares in the business. They also provide advice
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Gearing
The amount of funding in a business which is leant from a bank,versus funding which has been acquired from shareholders.
Current ratio
Shows investors how many times the company can pay its current liabilities out of its current assets
Interest repayments
On a loan the amount of interest that will need to be paid on top of payment of the original loan amount back to the bank
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Unlimited liability
If the business has debts the owners are liable for the amount and may need to sell their own assets to cover payments
Cash flow forecast
A form of forward looking budget which enables a business to look at its potential revenue flow and its expenses. About an estimate of the money a business will spend and receive within a year.Would typically appear on a business plan
Business plan
A document that describes a businesses aims and objective and how they can be achieved, and how the business intends to develop over time.