IGCSE Business 4 ELS (sources of Finance)

What is a source of finance?

• A method of earning incomes

• The different ways a business can fund themselves

Which is an example of an external source of finance?

• Owners' Funds
• Hire Purchase
• Retained profits
• Sale of assets

Which is an example of an external source of finance?

• Owners' Funds
• Sale of assets
• Retained profits
• Bank loan

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 owners' funds?

• There will be little or no interest
• You can pay in smaller installments
• They take a long time to arrange
• You don't have to pay it back

What is an advantage of friends & family loan?

• There will be little or no interest
• You can pay in smaller installments
• They take a long time 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 is a disadvantage of using owners' funds?

• It means you have no savings
• It can lead to personal conflicts
• It can take a long time to arrange
• They can be recalled immediately

Main source of finance for sole traders and partnerships. Using your own money.

• Bonds
• IPO
• Personal Funds
• Trade Credit

The first time that the stock of a private company is offered to the public.

• Stock Sale
• Trade Offering
• TM Trading
• IPO