GCSE Business: Sources of Finance

What does internal mean?

• A source from within the business
• A source from outside the business

What does external mean?

• A source from within the business
• A source from outside the business

Which is an example of an internal source of finance?

• Owners' Funds

• Venture Capital

• Overdraft

• Trade credit

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 an overdraft?

• There is never interest

• You can pay in smaller installments

• Useful for relatively small sums and short term finance

• 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

• Bank loan

Which of these facts about venture capital is NOT true?

• Venture capitalists tend to operate in fairly risky markets

• Venture capitalists would be paid a share of the profits

• Venture capitalists usually provide money only and have no interest in running the business

• Venture capitalists usually invest large sums of money