Sources of Finance for Organisations

Which of the following is an internal source of finance for a business?

• Bank loan

• Retained profit

• Venture capital

• Grant funding

Which type of organisation is owned and run by a single individual?

• Public Limited Company (PLC)

• Partnership

• Sole Trader

• Charity

Which of the following is an external source of finance?

• Selling assets

• Owners' capital

• Invoice factoring

• Retained profit

What is a key advantage of using retained profit as a source of finance?

• No interest needs to be paid

• Increases business debt

• Requires approval from external investors

• Reduces business ownership

Which of the following is a risk associated with using credit cards as a source of finance?

• Loss of business assets

• High interest rates

• Dilution of ownership

• Need for collateral

Which organisation type is most likely to access donations as a source of finance?

• Private Limited Company

• Social Enterprise

• Charity

• Sole Trader

What is a disadvantage of using bank loans as a source of finance?

• No need to repay

• Interest must be paid

• Loss of control

• No risk to assets

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

• Angel investors

• Retained profit

• Overdrafts

• Leasing

Why might a business need additional finance?

• To reduce profits

• To expand operations

• To decrease assets

• To avoid paying taxes

Which source of finance involves selling a share of the business to outside investors?

• Retained profit

• Private equity

• Bank overdraft

• Hire purchase