which source of finance? the following statements could be describing which sources of finance?

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 LoanLeasing

Hire PurchaseMortgage

2. Is specifically for buying property

Mortgage

3. Is an internal source of finance

Retained ProfitOwners/Share Capital

Sale of AssetsSale and Leaseback

Rights Issue

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

Share IssueVenture CapitalBusiness Angels

5. Is only suitable for buying stock from suppliers

Trade Credit

6. Does not have to be repaid

GrantsShare Issue

Owners/Share CapitalVenture CapitalBusiness AngelsSale of Assets

SubsidiesRetained Profits

Rights Issue

7. Would be suitable for the purchase of equipment

Hire PurchaseLeasing

Bank Loan

8. Involves borrowing money from the bank

OverdraftBank LoanMortgage

Credit Card

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

MortgageHire Purchase

Leasing

10. Interest rates are very high

Hire PurchaseOverdraft

11. Is a short term source of finance

OverdraftTrade CreditCredit Card

12. Is a long term source of finance

MortgageLong Term Bank Loan

Venture CapitalShare Issue