Sources of finance

• What is the main topic of the video on the Cents Business YouTube channel?

  Sources of business finance
• What does finance refer to in a business context?

  Sources of money for a business
• What is capital required for in a business?

  To start or run a business
• Why do new businesses find it difficult to raise finance?

  They have few customers and many competitors
• What is an overdraft facility?

  A bank allows a firm to withdraw more money
• What is trade credit?

  Suppliers deliver goods and wait for payment
• How does factoring work in short-term finance?

  Firms sell invoices for immediate cash
• What are the advantages and disadvantages of short-term finance?

  Advantages:

  • Quick availability
  • Accessible to those with bad credit
  • Flexible repayment terms

  
  

  Disadvantages:

  • High interest rates
• What is long-term finance?

  Funding obtained for over one year
• What is share capital?

  Funds invested by shareholders in a company
• What is a mortgage?

  A loan for buying property with long payments
• What is the difference between hired and leased equipment?

  Hired equipment is owned after final payment
• What are grants?

  Funds from charities or government for startups
• What are the advantages and disadvantages of long-term finance?

  Advantages:

  • Provides stability in debt management
  • Flexible financing options available
  • Low maintenance costs

  
  

  Disadvantages:

  • Higher interest rates than short-term loans
  • Greater overall interest costs
• What is a creditor?

  An individual or business that lends funds
• What is a debtor?

  An individual or business that borrows funds
• What is the cost of borrowing funds?

  Interest paid on borrowed money
• Why do creditors ask for security before lending funds?

  To ensure repayment of borrowed money
• What are internal sources of finance?

  Personal savings and retained profits
• What are external sources of finance?

  Bank loans and outside investors
• What questions should viewers answer in the comments?

  1. Two sources of short-term finance
  2. Two sources of long-term finance
  3. Difference between creditors and debtors
  4. One advantage of short-term finance
  5. One disadvantage of long-term finance