Finance sources (v.2) Edexcel business A level

A business would choose a bank loan :

• if interest rates are high

• if they want equity investors

• if they have a bad credit history

• if they want long term finance

A firm wants an expensive photocopier but does not want to own it :

• take out a loan

• take out a leasing contract

• take out an overdraft

• sell shares

Share capital as a source of finance is an option for :

• sole traders

• partnerships

• companies

• charities

Limited liability means that investors are

• more likely to invest

• less likely to invest

• putting personal possessions at risk

A short-term source of finance to overcome cash shortage :

• mortgage

• 5 year loan

• overdraft

• venture capital

Finance to help a firm buy stock from supplier

• loan

• trade credit

• leasing

• grant

Sometimes called Risk Capital

• bank loan

• vulture capital

• adventure capital

• venture capital

What can a PLC do that an LTD cannot do ?

• sell shares

• lease equipment

• sell shares to general public

• take a bank loan

An individual that invests in a company and advises it

• partner

• business angel

• venture capital

• peer-peer lender

Dividends are payable :

• by sole traders

• by shareholders

• to shareholders every year

• to shareholders every year if profits are made