OCR GCSE Business 9 - 1 Sources of finance

Funds that have been earned by the business are used within the business and not paid out to the owners

• Retained profit

• Crowdfunding

• Sale of assets

• Owners capital

Goods are obtained from another business without immediate payment being made

• Trade credit

• Owners capital

• Share issue

• Crowdfunding

Funds received following the sale of items owned by the business

• Sale of assets

• Trade credit

• Overdraft

• Bank loan

A bank allows a business to spend more money than there is in its current account

• Overdraft

• bank loan

• Mortgage

• Trade credit

Which is NOT an advantage of taking a new partner

• Existing owner (s) may have to share control

• The money does not need to be paid back

• The new owner may bring new skills and more finance

• No interest to pay

'Interest charged daily' and 'short term solution' are which source of finance?

• Overdraft

• Bank loan

• Share issue

• Retained profit

Which is NOT an advantage of using trade credit?

• Suppliers might not be willing to give trade credit

• Goods can be sold before they are paid for

• Interest is only charged if not paid by due date

• Helps with cash flow

'The money does not need to be paid back

Profits are distributed to owners

Existing owners might be bought out in a takeover

Existing owner may have to share control'

Which source of finance?

(a)