This is a safe source of finance, the bank charges interest on the loan amount. But it is difficult with no credit history, as the business must demonstrate their ability to repay.

Used to fund revenue expenditure and are usually repaid within one year.

Instead of purchasing, the business pays a set fee to lease an asset for a period of time (leasing companies maintain and replace the asset if damaged).

They are a short-term bank loan which is used in a matter of days to cover cash shortage (interest is only paid when the account is overdrawn).

Founds offered by the government, they are available only for certain business and the money is low.

It is similar to leasing, but instead, this gives the asset once the monthly payments have been made.

Specialist finance providers, which invest in smaller, risky ventures and don’t ask for security. They loan money in return for a share of business ownership/share of profit.

When a business does not pay immediately for goods it purchases.

This is used to resolve short-term cash flow crisis but also a way of funding long-term growth. The business sells an asset and eases it back from its new owner, allowing an immediate inflow of cash at the expense of long-term lease payments.

Form of a long-term loan to a limited company that uses fixed interest rates which are repayable over a specific time period.

It means ‘selling’ a debt (money owed to a firm by its debtors). Implies giving the firm a percentage of the debt, then recover it full for themselves, in which the business gets immediate access to cash but may forego (give up) the full value of the debt.

Used to fund capital expenditure, which is repaid over a period longer than one year.