Investor

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Investor

People or organisations that provide the entrepreneur with the capital (money) needed to establish and operate the business.

Types of Capital:

Loan Capital:

The entrepreneur takes out a loan from a lender such as a bank.

The amount of money borrowed must be repaid with interest within an agreed period of time

Grant

Money given to a business by state agencies such as the Local Enterprise Office (LEO)

The grant does not have to be repaid, as long as the receiver meets certain conditions

E.G Creating a certain number of jobs

Equity Capital

Money invested in the business by individuals or other businesses.

These investors become part owners in the firm

Entitled to a share of the company's profits, Dividends