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