Please enable JavaScript.

Coggle requires JavaScript to display documents.

Management of Finance, Large Businesses will have their own finance…

- - - - Trade Credit - Purchasing goods from a supplier and paying them back at a later date, this allows the company time to use the materials for the product and then sell the product before paying back with the profits of the customers purchases
      - Debt Factoring - A business sells its customer accounts that havnt paid back debts to a debt factoring company to get quick cash instead of waiting a certain period of time to get the full amount.
      - Bank overdraft - Form of loan from the bank, taking out more money from your bank account than you have in it. (suitable for short term cash flow issues)
      - Sale of an asset - Selling unwanted or unused assets i.e a van
    - - Leasing - To rent an asset that the business requires, such as a tractor. Mothly payments are made and the owners of the leased item are responsiblre for the upkeep of it.
      - Hire Purchase - Putting a deposti towards an item and then paying the rest in monthly instalments until you own it.
    - - Loan from family or friends of family - may not need to be paid back or are paid back with little or no interest charges
      - Loan (ie bank loan) - Money borrowed from the bank and paid back with an interest charge.
      - Mortgage - Borrowed money from the bank to purchase a property.
      - Share issue - Finance available for private or public limited companys. can issue more shares in the company and obtain finance from sales. (doesnt need to be paid back)
      - Debenture - Long term loan secured against a specific asset (ie a factory) and is repayable at fixed date with fixed interest.
      - Venture capital - Investors provide money to organisations that are starting up or expanding. usually used when theres a visk with investing (dragons den is an example of venture capitalists)
      - Take on a partner - new partners will invest their equity into the business
      - Crowd funding - getting small amounts of finance from large amounts of people, investors donating money may get rewards or recieve a percentage of profits.
      - Sale and leaseback agreements - selling assets and then leasing them back from the company or just lease from the start to free funds which would have been tied up in its purchase.
      - Princes Trust - being aged between 18 and 25 and wanting to run your own business you may be able to recieve a loan of up to £5000 and grants of up to £1000
    - - Grants - money from government that doesnt need to be repaid (must meet certain criterias to gain a grant)
      - The Governments Loan Guarentee Scheme - Allows small to medium sized firms to gain loans that would be too risky for banks to give, the government agrees to pay 70% of the loan should the borrower default, in return the borrower has to pay higher interest rates than the market rate and an insurance premium.