Sources of finance

A place from which we can get something.

• internal

• external

• source

Raising money from inside the business

• internal

• external

Capital raised outside the business.

• internal

• external

The money that is required for less than a year.

It is normally used to cover the day-to-day running costs or to pay for operations.

• short-term

• long-term

Select the short-term sources of finance.

• mortgage

• trade credit

• overdraft

• bank loan

• debt factoring

This means that the businesses do not pay the supplier straight away.

• overdraft

• trade credit

• debt factoring

Businesses can sell the debts of their customers to debt-factoring companies.

• overdraft

• bank loan

• debt factoring

It is normally used to pay for items that will be used for many years.

• short-term

• long-term

What are the long-term external sources of finance?

• bank loan

• leasing

• hire purchase

• overdraft

Leasing is a synonym of renting (machinery, buildings, equipment..)

• True

• False