Finance Sources Quiz

What is debt factoring?

• Borrowing money from a bank

• Investing in the stock market

• Using retained profit for business growth

• Selling debt to another organization

What is the advantage of using an overdraft as a source of finance?

• It allows businesses to spend beyond their bank account limit

• It provides funds for business growth without affecting shareholders

• It brings in large sums of money without any fees

• It involves selling a stake of the organization to new owners

What is the major advantage of using retained profit as a source of finance?

• It provides funds for business growth without affecting shareholders

• It allows businesses to spend beyond their bank account limit

• It doesn't require paying back in any way

• It brings in large sums of money without any fees

What is the limitation of using share capital as a source of finance?

• It allows businesses to spend beyond their bank account limit

• It provides funds for business growth without affecting shareholders

• It involves relinquishing some control of the organization

• It brings in large sums of money without any fees

What is the advantage of seeking loans from financial institutions like banks?

• It brings in large sums of money without any fees

• It allows businesses to spend beyond their bank account limit

• It's a formal agreement with structured repayments

• It involves relinquishing some control of the organization

What is the limitation of borrowing from venture capitalists?

• It brings in large sums of money without any fees

• It involves relinquishing some control of the organization

• It often involves repayment at a higher rate of interest

• It provides funds for business growth without affecting shareholders

What is the purpose of an overdraft facility?

• To bring in large sums of money without any fees

• To distribute profits to shareholders

• To spend even when the business has run out of money

• To invest in business growth and expansion

What is the role of business angels in venture capital?

• To provide loans to businesses that have been rejected by banks

• To invest in a business in return for a share of ownership and provide expertise

• To bring in large sums of money without any fees

• To involve new owners in the organization