Raising Finance

Charlotte Webber
Mind Map by Charlotte Webber, updated more than 1 year ago
Charlotte Webber
Created by Charlotte Webber about 7 years ago
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Business Unit 1 Mind Map on Raising Finance, created by Charlotte Webber on 16/05/2013.
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Raising Finance
1 Retained profits- profits earned by a business and are kept than distributing the profit to the owner of the business
1.1 Advantages
1.1.1 owner in charge of how they're used
1.1.2 low costs and flexible
1.2 Disadvantages
1.2.1 need to commence trading and exceed break even output before profits can be earned
1.2.2 does take time
2 Venture Capital- invest in large sums of money
2.1 Advantages
2.1.1 Large amounts of cash
2.1.2 potential large amounts of money
2.2 Disadvantages
2.2.1 only invest in low risk businesses
2.2.2 Time consuming
3 Bank overdrafts- agreed amount of excess money that can be with drawed when account is empty
3.1 Advantages
3.1.1 Instant finance
3.1.2 Students have no interest
3.2 Disadvantages
3.2.1 Repayment on demand
3.2.2 Higher interest rates than loads
4 Bank Loans- lent of money from a bank over a set period of time
4.1 Advantages
4.1.1 Long term
4.1.2 Fixed repayment periods
4.1.3 Instant finance
4.2 Disadvantages
4.2.1 Interest charge
4.2.2 provide a business plan
5 Loans from family and friends
5.1 Advantages
5.1.1 no interest
5.1.2 pay back anytime
5.2 Disadvantages
5.2.1 not high amounts
5.2.2 strain on relationships
6 Credit Card- credit from bank
6.1 Advantages
6.1.1 30-40 free day credit
6.1.2 quick and easy
6.2 Disadvantages
6.2.1 Receive penalties
6.2.2 Interst
7 Share capital- sell percentage of business to invest
7.1 Advantages
7.1.1 large sums of money
7.1.2 no interest
7.2 Disadvantages
7.2.1 Lose control
7.2.2 share holders expect share of profit
7.2.2.1 Dividend
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