Sources of Finance- BTEC Business Unit 3

Which is an example of an internal source of finance?

• Owners' Funds
• Hire Purchase
• Leasing
• Trade credit

This is the cash that is generated by the business when it operates successfully

• Retained profits

• Share capital

• Angel investor

• Owner savings

Which of the statements about retained profits is false?

• You have unlimited amounts of money available

• Shareholders and employees could be frustrated because there is less profit to be 'shared out'

• You do not have to pay interest

• You are free to use it for any purpose

Which of the following statements about bank loans is not true?

• Usually used for large amounts of money that need to be paid back over a longer time-frame

• Interest rates make the loan more expensive

• Easy to get

• Usually cheaper than consistently using a bank overdraft

True or false - crowdfunding is usually only used for new business start-ups/concepts and is therefore inappropriate for existing large, profitable businesses

• True

• False

A loan that is secured on a property is called a 

• Mortgage
• Overdraft
• Credit Card
• Government Grant

This type of finance does not need to be repaid.

• Bank Loan
• Overdraft
• Mortgage
• Government Grant

A Venture Capital / Business Angel will expect a share of the profits.

• True
• False

Which of the following sources of finance does not have interest added.

• Overdraft
• Owners' Capital
• Mortgage
• Bank Loan

What of the following is a source of internal finance?

• Selling assets

• Trade credit

• A bank loan