Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
SlideShare a Scribd company logo

Sources Of Finance

•
•
M
Marcus9000

A run through the main sources of finance for business organisations. Useful for Standard Grade Business Management and Higher Business Management

Related slideshows

Common stock.ppt
Common stock.pptCommon stock.ppt
Common stock.ppt
 
management of foreign exchange and risk management
management of foreign exchange and risk managementmanagement of foreign exchange and risk management
management of foreign exchange and risk management
 
Swaps
SwapsSwaps
Swaps
 
1 of 16
Sources of Finance
Bank Loans Money given from banks Paid back with interest Usually easily available
Savings The owner invests more of his personal cash No loss of control Limited amount
Leasing Renting of vehicles or equipment More expensive in the long term than buying the asset Asset is replaced when obsolete Spread payments
Share Issue Dividends have to be paid to shareholders Loss of control possible Where shares are sold to investors allowing very large sums to be raised without incurring interest
Debentures A long term loan to plcs Debenture holders receive fixed interest Debenture holders receive the money lent back No control of the organisation is lost
Venture Capitalists lend money when banks think it is too risky Large amounts lent but interest is high Part ownership often needed in exchange for finance (% of business)
Hire Purchase A deposit is required and the rest of the price is paid in installments Ownership remains with the finance company until the last installment is made
Overdraft A facility arranged with banks to allow you to borrow more than you have in your account Has to be arranged Can be refused Can incur interest
Mortgage A large sum of money borrowed from a bank or building society to purchase property Monthly repayments required (interest) Long term borrowing eg 25 years
Grant Some of the money paid by eg Local Authority or Government No need to repay a grant May be given if organisation is creating jobs in an area of high unemployment etc
Divestment Equipment or property which is no longer required is sold off to raise cash
Retained Profit Profits made are not distributed to the owners but kept back for reinvestment
Factoring Factors are usually banks who will give you 80% of the debt owed up front They then chase the other 20% for you and when it is paid back they charge a fee
Additional Sources of Finance LEC – Scottish Enterprise Renfrewshire Local authorities – East Renfrewshire Council Government Partnerships – Business Gateway Grants and allowances – Repayable Grants, Soft Loans, Subsidies EU grants – Regional Development Fund & Social Fund
More slides and videos on these topics will be found at: www.mrmcgowan.blogspot.com For the following subjects: Accounting & Finance Administration Business Management

More Related Content

Sources Of Finance

  • 2. Bank Loans Money given from banks Paid back with interest Usually easily available
  • 3. Savings The owner invests more of his personal cash No loss of control Limited amount
  • 4. Leasing Renting of vehicles or equipment More expensive in the long term than buying the asset Asset is replaced when obsolete Spread payments
  • 5. Share Issue Dividends have to be paid to shareholders Loss of control possible Where shares are sold to investors allowing very large sums to be raised without incurring interest
  • 6. Debentures A long term loan to plcs Debenture holders receive fixed interest Debenture holders receive the money lent back No control of the organisation is lost
  • 7. Venture Capitalists lend money when banks think it is too risky Large amounts lent but interest is high Part ownership often needed in exchange for finance (% of business)
  • 8. Hire Purchase A deposit is required and the rest of the price is paid in installments Ownership remains with the finance company until the last installment is made
  • 9. Overdraft A facility arranged with banks to allow you to borrow more than you have in your account Has to be arranged Can be refused Can incur interest
  • 10. Mortgage A large sum of money borrowed from a bank or building society to purchase property Monthly repayments required (interest) Long term borrowing eg 25 years
  • 11. Grant Some of the money paid by eg Local Authority or Government No need to repay a grant May be given if organisation is creating jobs in an area of high unemployment etc
  • 12. Divestment Equipment or property which is no longer required is sold off to raise cash
  • 13. Retained Profit Profits made are not distributed to the owners but kept back for reinvestment
  • 14. Factoring Factors are usually banks who will give you 80% of the debt owed up front They then chase the other 20% for you and when it is paid back they charge a fee
  • 15. Additional Sources of Finance LEC – Scottish Enterprise Renfrewshire Local authorities – East Renfrewshire Council Government Partnerships – Business Gateway Grants and allowances – Repayable Grants, Soft Loans, Subsidies EU grants – Regional Development Fund & Social Fund
  • 16. More slides and videos on these topics will be found at: www.mrmcgowan.blogspot.com For the following subjects: Accounting & Finance Administration Business Management