Y12 IBBM Sources of Finance

1. These are individuals who provide capital to start-ups or small businesses in exchange for ownership equity or convertible debt. What are they called?

• 1. A) Loan capital

• 1. B) Business angels

• 1. C) Trade credit

• 1. D) Stock exchange

1. This is a method of raising funds by asking a large number of people, typically via the internet, to invest a small amount of money in a business or project.

• 1. A) Share issue

• 1. B) Overdraft

• 1. C) Crowdfunding

• 1. D) Leasing

Arrange these in order of the amount of finance each can collect for a business from lowest to highest

• Overdrafts

• Microfinance

• Trade Credit

• Share Capital

• Long term

  Bank Loans

1. What are the financial resources obtained from outside the company, including banks and investors called?

• 1. A) Internal sources of finance

• 1. B) External sources of finance

• 1. C) Retained profit

• 1. D) Revenue expenditure

1. Profits that have not been distributed as dividends are considered part of

• 1. A) Distributed profit

• 1. B) Personal funds

• C) ) Internal sources of finance

• 1. D) External sources of finance

Organize these options into into internal and external sources of finance

Groups:

(a) Internal

,

(b) External

• Share capital

• Leasing

• Owner's funds

• Crowdfunding

• Trade Credit

• Bank loans

• Sales of assets

• Retained Profit

1. Instead of purchasing an asset, a company can use this method to obtain an asset while paying periodic amounts. What is this called?

• 1. A) Trade credit

• 1. B) Crowdfunding

• 1. C) Leasing

• 1. D) Microfinance

Organize these options into short term and long term sources of finance

Groups:

(a) Short Term

,

(b) Long Term

• Bank loans that need to be repaid after 3 years

• Overdraft

• Mortgage

• Trade Credit

13. Which term refers to the profits that are reinvested in the business rather than paid out as dividends?

• • A) Gross Profit

• • B) Profit before tax

• • C) Distributed Profit

• • D) Retained profit

This method of finance is particularly advantageous if the business only needs to use the fixed capital

for a short period of time, or if it does not want to deal with the hassles and costs of repairs and maintenance.

• Microfinance

• Self-finance

• Leasing

• Debentures