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 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

What is an advantage of owners' funds?

• There will be little or no interest
• You can pay in smaller installments
• They take a long time to arrange
• You don't have to pay it back

What is a disadvantage of a friends and family loan?

• It means you have no savings
• It can lead to personal conflicts
• It can take a long time to arrange
• They can be recalled immediately

What is an advantage of an overdraft?

• There is never interest

• You can pay in smaller installments

• Useful for relatively small sums and short term finance

• You don't have to pay it back