T level Finance :Sources of finance

What are the two main sources of finance for businesses?

• Debt and Equity

• Internal and External

• Short-term and Long-term

• Fixed and Variable

Which of the following is not an external source of finance?

• Bank loan

• Retained profit

• Crowdfunding

• Government grants

Which type of business is legally separate from its owners and offers protection against personal liability?

• Sole trader

• Partnership

• Incorporated business

• Unincorporated business

Which of the following sources of finance does not require repayment?

• Bank overdraft

• Trade credit

• Government grants

• Hire purchase

A bank overdraft is best suited for:

• Long-term expansion projects

• Daily cash flow management

• Buying property for business use

• Large equipment purchases

What is a disadvantage of using venture capital?

• Requires business owners to give up a percentage of their equity

• Higher interest rates compared to bank loans

• Cannot be used for startup businesses

• Requires a long approval process from the government

Which of the following is an advantage of using a credit card for business finance?

• Fixed interest rates

• No spending limits

• Easy online transactions and an interest-free period

• No risk of overspending

What is the main difference between a bank loan and an overdraft?

• Loans are long-term, overdrafts are usually short-term

• Loans do not require interest payments, overdrafts do

What is the main purpose of invoice factoring?

• To offer suppliers an extended payment term

• To convert unpaid invoices into immediate cash flow

• To provide short-term loans for business growth

• To avoid paying taxes on invoices

Which of the following funding sources requires a business to give up ownership shares?

• Government grant

• Leasing

• Selling shares

• Hire purchase