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Sources of Finance (**venture capitalists (source of private equity…
Sources of Finance
**venture capitalists
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willing to take on higher risks, expect higher rewards
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actively involved in the management of companies and usually have expertise in the area of the business they are funding
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business angels
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often bring their own expertise, experience and contracts with them
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hire-purchase agreement
a tripartite agreement: at the time the contract is entered int the consumer does not agree to buy goods, therefore the consumer would not be able to pass title to the goods to a 3rd party if they sold them before they had exercised their rights to buy the goods at the end of the hire period
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trade credit
only available to businesses with a track record and not generally available for start-up businesses
overdraft
useful facility for short-term funding, but could be risky if the overdraft is for a large sum as the bank may insist that it be repaid at any time
credit sale agreement
ownership and possession of the goods passes to the buyer, but he is given time to pay
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trading on credit:
- Consumer Credit Act 1974 (2006);
- licensing by FCA
- advertisement - fair and reasonably comprehensive picture of the credit offered (otherwise - offense committed )