Flashcards

Sources Of Finance

P Engineer English 3 cards

Cards in this deck (3)

1Owner Investment An owner investment is when the owner of a business puts in his own money to start it up. This is quite risky because if the business doesn't go as planned, then the owner will lose a lot of money on a personal basis.Bank Loan
A bank loan is when a business borrows money from the bank, on the condition that they pay it back after a certain amount of time. This is used if you want to start up a business, because you get money to start it up with.
2Mortgage A mortgage is when you buy a property, but you pay for it in small chunks over time. Until you pay back your mortgage, the bank will own a certain percentage or your property.Trade Credits
Trade credits are basically invisible money. When you buy something, but don't pay for it until later, you are using trade credits. These exist so that company's can buy equipment, but not have to pay for it until they can afford it.
3Grants A grant is when a charity or a large company give you money to start off your business with. With a grant, you don't have to pay them back, because it is effectively a donation.Over Draught
An over draught is when you spend more money than you have in your account. It is basically an unorganised loan - you don't have to supply the bank with a business plan or any proof that you can pay it back..w