Which source of finance? The following statements could be describing which sources of finance?

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Presentation transcript:

Which source of finance? The following statements could be describing which sources of finance?

1. Is paid back in monthly payments for an agreed period of time

2. Is specifically for buying property

3. Is an internal source of finance

4. Involves selling part of the business and sharing future profits

5. Is only suitable for buying stock from suppliers

6. Does not have to be repaid

7. Is suitable for the purchase of equipment

8. Involves borrowing money from the bank

9. The asset can be repossessed if payments are not made

10. Interest rates are very high

11. Is a short term source of finance

12. Is a long term source of finance

Which source of finance? Answers

1. Is paid in monthly payments for an agreed period of time Bank Loan Leasing Hire Purchase Mortgage

2. Is specifically for buying property Mortgage

3. Is an internal source of finance Retained Profit Owners/Share Capital Sale of Assets Sale and Leaseback Rights Issue

4. Involves selling part of the business and sharing future profits Share Issue Venture Capital Business Angels

5. Is only suitable for buying stock from suppliers Trade Credit

6. Does not have to be repaid Grants Share Issue Owners/Share Capital Venture Capital Business Angels Sale of Assets Subsidies Retained Profits Rights Issue

7. Would be suitable for the purchase of equipment Hire Purchase Leasing Bank Loan

8. Involves borrowing money from the bank Overdraft Bank Loan Mortgage Credit Card

9. The asset can be repossessed if payments are not made Mortgage Hire Purchase Leasing

10. Interest rates are very high Hire Purchase Overdraft

11. Is a short term source of finance Overdraft Trade Credit Credit Card

12. Is a long term source of finance Mortgage Long Term Bank Loan Venture Capital Share Issue