test 2

• What are the sources of external finance?

  • Family and friends
  • Banks
  • Peer-to-peer funding
  • Business angels
  • Crowdfunding
  • Other businesses
• What are the methods of external finance?

  • Loans
  • Share capital
  • Venture capital
  • Overdrafts
  • Leasing
  • Trade credit
  • Grants
• What are the advantages of using family and friends for finance?

  Flexible repayment terms and conditions
• What are the disadvantages of using family and friends for finance?

  May place pressure on relationships
• What services do banks offer businesses?

  Loans, advice, and financial services
• What is peer-to-peer funding?

  Individuals lending to other individuals online
• What is crowdfunding?

  Raising finance from many small investors
• How does crowdfunding work?

  Business explains funding needs online
• What is a loan?

  A set amount of money to be repaid
• What is share capital?

  Finance raised from selling shares
• What is venture capital?

  Investment for equity in startups
• What is an overdraft?

  Facility to overspend on a current account
• What are the advantages of overdrafts?

  Flexibility and only pay for borrowed amount
• What are the disadvantages of overdrafts?

  Can be called in at any time by banks
• What is leasing?

  Using an asset without owning it
• What is trade credit?

  Paying suppliers after receiving goods
• What are grants?

  Fixed amounts provided for specific projects
• What have you learned about external finance?

  • Sources: family, banks, P2P, angels, crowdfunding, other businesses
  • Methods: loans, share capital, venture capital, overdrafts, leasing, trade credit, grants