Sources of finance

What is an advantage of a business using owner's capital as a source of finance?

• Very low rate of interest

• It will bring new skills to the business

• It doesn't need repaying

• Repayment is always spread over a period time

What is an advantage of a bank loan?

• There will be little or no interest
• You can pay in smaller installments
• They are quick and easy to arrange
• You don't have to pay it back

What is an advantage of an overdraft?

• There is never interest
• You can pay in smaller installments
• They are quick and easy to arrange
• You don't have to pay it back

What type of finance involves less profit going to the owners?

• Retained profit

• Sale of assets

• Overdraft

• Owner's capital

What source of finance could lead to an unwanted takeover of the business?

• Sale of assets

• Owner's capital

• Trade credit

• Share issue

What source of finance often requires no interest, equity, security or repayment?

• Bank loan

• Crowdfunding

• Taking on a new partner

• Overdraft

Which of these sources of finance is likely to charge the most interest?

• Trade credit

• Retained profit

• Bank loan

• Overdraft

What source of finance is not available to unlimited companies?

• Taking on a new partner

• Trade Credit

• Share Issue

• Retained Profit

What source of finance will lead to the owners taking a smaller share of the profits?

• Bank loan

• Taking on a new partner

• Crowdfunding

• Trade Credit

Which of the these sources of finance is least useful for dealing with cash-flow issues?

• Trade Credit

• Crowdfunding

• Overdraft

• Owner's Capital