Sources of finance

• What is another term for debt factoring?

  Invoice factoring
• What happens in debt factoring?

  Invoices are passed to a debt factoring company
• What percentage of invoice value can a business receive in debt factoring?

  Up to 100%
• What is an overdraft?

  Borrowing money using your current account
• How does an overdraft work?

  You can spend more than is in your account
• What is retained profit?

  Net income kept within a business
• Why is retained profit important?

  It indicates long-term financial stability
• What is share capital?

  Funding raised through issuing stock
• What is authorized share capital?

  Maximum amount a company can raise
• What is issued share capital?

  Total amount of shares sold to investors
• What is a venture capital investment fund?

  A pooled investment for startups and SMEs
• Who manages venture capital investment funds?

  VC firms
• Who are limited partners (LPs) in venture capital?

  Pension funds, endowments, and wealthy individuals
• What is a bank loan?

  A long-term source of finance
• How is a bank loan typically repaid?

  In monthly installments with interest
• What is crowdfunding?

  Raising equity finance from many investors
• How does crowdfunding differ from business angel investment?

  Crowdfunding attracts many small investors
• What does crowdfunding involve?

  Pooling small amounts of capital from individuals
• What type of causes are most active in crowdfunding?

  Social causes