Sources of Financing

These are a form of ordinary shares, which are entitled to a dividend only after a certain date or if profits rise above a certain amount.

• Equity Shares

• Deferred ordinary shares

• Retained earnings

• Bonus shares

It provides a way of raising new share capital by means of an offer to existing shareholders, inviting them to subscribe cash for new shares in proportion to their existing holdings.

• Right issue

• Dividend shares

• Equity sharers

• Retained earnings

Have a fixed percentage dividend before any dividend is paid to the ordinary shareholders.

• Bonus shares

• Common shares

• Preference shares

• Retained earnings

It is long-term debt capital raised by a company for which interest is paid, usually half yearly and at a fixed rate.

• Loan shark

• Loan Stock

• Bank loan

• Bonds

Defined as the written acknowledgement of a debt incurred by a company, normally containing provisions about the payment of interest and the eventual repayment of capital.

• Bond

• Mortgage

• Loan stock

• Debenture

A loan at a variable rate of interest is sometimes referred to as

• Fixed rate

• Floating rate loan

• Variable rate

• Lien

It is an agreement between two parties, the "lessor" and the "lessee".

• Franchise

• Lease

• Contract

• Agreement

These are lease agreements between the user of the leased asset (the lessee) and a provider of finance (the lessor) for most, or all, of the asset's expected useful life.

• Franchise

• Finance franchise

• Finance Lease

• Lease

It is similar to leasing, with the exception that ownership of the goods passes to the hire purchase customer on payment of the final credit installment, whereas a lessee never becomes the owner of the goods.

• Hire loan

• Hire credit

• Hire purchase

• Hire lease

It is money put into an enterprise which may all be lost if the enterprise fails

• Initial capital

• Venture capital

• Working capital

• Owners equit