Sources of finance for growing and established businesses:

• What is retained profit as a source of finance?

  Reinvested business profits
• What is equity finance as a source of finance?

  Selling shares to raise capital
• What are the common sources of finance for business growth?

  Loans, equity, grants, crowdfunding
• Businesses may seek growth to increase profits or market share.


  True
• The choice of financing method depends on factors like the business's stage of growth and risk appetite.

  True
• What are the common external sources of finance for established businesses?

  Loans, equity, grants, crowdfunding
• Business growth can lead to higher returns and financial stability
• Steps in the business growth process

  1️⃣ Identify growth opportunities

  2️⃣ Develop a growth strategy

  3️⃣ Secure financing

  4️⃣ Implement the growth strategy
• Loans require collateral to secure repayment.


  True
• Crowdfunding can boost brand exposure
• Retained profits are unlimited for all businesses.

  False
• What is a major disadvantage of using retained profits as a source of finance?

  Limited funds available
• Order the external sources of finance from least to most dependent on business performance:

  1️⃣ Loans

  2️⃣ Equity finance

  3️⃣ Grants

  4️⃣ Crowdfunding
• Match the external financing source with its description:

  Loans ↔️ Borrowed money that must be repaid with interest

  Equity finance ↔️ Selling shares to raise capital

  Grants ↔️ Financial assistance from government or organizations

  Crowdfunding ↔️ Raising funds from a large number of people online
• What is the primary goal of business growth in terms of profitability?

  Increase profits
• Retained profits are limited and depend on the business's profitability
• Equity finance dilutes business ownership
• Borrowed money that must be repaid with interest is called a loan
• What is a disadvantage of crowdfunding as a financing method?

  Potential for public backlash
• What is a disadvantage of using equity finance for an established business?

  Dilutes ownership
• What is an advantage of using retained profits as a source of finance?

  No interest payments
• What is a key characteristic of internal financing?

  No external approval needed
• External financing always carries a higher risk than internal financing.


  True
• Match the factor with its effect on financing choices:

  Access to Capital ↔️ Businesses may use alternative options

  Cost of Financing ↔️ Cheaper options are preferable

  Ownership Considerations ↔️ Avoid equity financing
• Business growth refers to the expansion of a company's operations, sales, or market share
• Loans are borrowed money that must be repaid with interest
• Businesses grow to increase profits, expand market share, or improve competitiveness
• Retained profits do not require interest payments and maintain ownership of the business.


  True
• Match the external source of finance with its disadvantage:

  Loans ↔️ Interest costs

  Equity finance ↔️ Dilutes ownership

  Grants ↔️ Competitive application process

  Crowdfunding ↔️ Potential public backlash
• Expanding market share improves a company's competitive edge.


  True
• What are the main sources of finance for businesses?

  Retained profits and loans
• What is a key disadvantage of equity finance?

  Dilution of ownership
• Match the source of finance with its advantage:

  Retained profits ↔️ No additional interest payments

  Loans ↔️ Fixed repayment schedule

  Equity finance ↔️ Increases capital base

  Grants ↔️ No repayment needed
• What is the term for profits reinvested into a business rather than distributed as dividends?

  Retained profits
• The amount of retained profits available depends on the business's profitability.


  True
• Retained profits require repayment with interest.

  False
• Equity finance dilutes the business's ownership
• Order the strategic reasons for business growth from least to most dependent on external factors:

  1️⃣ Increase profits

  2️⃣ Expand market share

  3️⃣ Improve competitiveness
• The choice of financing method depends on the business's risk appetite and access to capital.


  True
• Crowdfunding requires strong marketing to succeed.


  True