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Your laptop has broken. List all the ways you could obtain the money to buy a new one.
(5mins)
LESSON TITLE: Sources of Finance
CF: Key Skills (L5) you will be able to use your numeracy skills to calculate financial transactions of a business and to interpret financial data.
SUCCESS CRITERIA:
1) To list the internal and external sources of finance available to a business.2) To describe in your own words, the external sources of
finance (l-term/s-term) available to a business.
Sources of Finance
EXTERNAL
Working Capital
Sale of assets
S-TERM
Bank Loan
Hire Purchase
Trade Credit
Leasing
Debt Factoring
Credit Cards
SHARE CAPITAL
LOAN CAPITAL
Mortgage
Business Angels
Debentures
Government
Industrial Specialists
Profit
INTERNAL
L-TERM
Overdraft
Activity 18.1
Complete activity 18.1 on pg. 177
[10mins]
Sources of Finance
EXTERNAL
Profit
Working Capital
Sale of assets
S-TERM
Bank Loan
Hire Purchase
Trade Credit
Leasing
Debt Factoring
Credit Cards
SHARE CAPITAL
LOAN CAPITAL
Mortgage
Business Angels
Debentures
Government
Industrial Specialists
INTERNAL
L-TERM
Overdraft
Sources of FinanceDebt Factoring
CUSTOMERCUSTOMER
1) Sells product to customer and sends invoice (30-90days credit)
3)Pays debt factoring company
2) Pays invoice in full (minus commission)
Sources of Finance
Working Capital
Sale of assets
S-TERM
Bank Loan
Hire Purchase
Trade Credit
Leasing
Debt Factoring
Credit Cards
SHARE CAPITAL
LOAN CAPITAL
Mortgage
Business Angels
Debentures
Government
Industrial Specialists
INTERNAL EXTERNAL
Profit
Overdraft
L-TERM
Sources of Finance
Debentures
- Loan with ‘no voting rights’
- Fixed repayment date
- Fixed interest rate
Sources of Finance
EXTERNAL
Profit
Working Capital
Sale of assets
S-TERM
Overdraft
Bank Loan
Hire Purchase
Trade Credit
Leasing
Debt Factoring
Credit Cards
L-TERM
SHARE CAPITAL
LOAN CAPITAL
Mortgage
Business Angels
Debentures
Government
Industrial Specialists
INTERNAL
Sources of FinanceIndustrial Specialists-
- Such as ‘Venture Capitalists’
- Loans for businesses that find it difficult to raise funds using banks because they are seen as too risky.
Business Angels-
- Individuals who invest between £10,000
and £100,000.
- Often in exchange for a stake in the business.
Activity 18.4
Draw and complete the table on pg. 181.
[15mins]
Case Study
Complete case study activity.
[15mins]
Key Terms
S-term Profit (net) Working Capital Share Capital
Mortgage Debentures Venture Capitalists
Business Angels
Hire Purchase Leasing Trade Credit Debt Factoring
Industrial Specialists
LESSON TITLE: Sources of Finance
CF: Key Skills (L5) you will be able to use your numeracy skills to calculate financial transactions of a business and to interpret financial data.
SUCCESS CRITERIA:
1) To list the internal and external sources of finance available to a business.2) To describe in your own words, the external sources of
finance (l-term/s-term) available to a business.
Sources of Finance: Revision
Complete ‘Revision Activity’ on pg.183.
Sources of Finance: Revision
Produce a Revision Aid for the topic of ‘Source of Finance’.
