Types of Finance Explained
Explore different types of finance from trade creditors to retained earnings, understanding how they work, their benefits, and potential drawbacks in various business scenarios.
Uploaded on Sep 25, 2024 | 0 Views
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Presentation Transcript
Who am I? Can you identify which type of finance I am from the clues?
Who am I? I m effectively a free source of money for you if you pay what you owe within the agreed time period, often 30 days. But if you don t pay up for what you ve had within 30 days, there can be a charge If you are a bad payer, then you might be refused me.
Who am I? I m useful if a business needs to raise a large amount of money in order to buy some new machines. I have to be repaid in monthly instalments I m really interesting.
Who am I? I have to be arranged with a bank, and once arranged, can be used up to an agreed limit. Really useful to have if you are likely to have a cash flow problem When you use me, you do have to pay interest
Who am I? I can be sold to people,who, in exchange for giving you money, become part owners of your business. I can be issued and sold to lots of people in order to raise large amounts of money for the business. The people who buy me expect to receive a share of the profits the business makes, called a dividend.
Who am I? I can be arranged so that you can use buildings or equipment without having to find or borrow the money to purchase them There is a monthly or annual charge, You will never own the asset you are using
Who am I? You have offered credit to your customers and they may owe you money. I can be sold in order to provide money for your business to help overcome a cash flow problem You can sell me so that you get your money now, but you wont get all that is owed
Who am I? If you have some of me, and use me to fund your business, then there is no charge for using me. I do not have to be repaid If you use too much of me, the owners of the business might grumble because they won t receive a dividend
Answers Trade creditors Loan Overdraft Share issue Leasing Debt factoring Retained earnings
