Business 3.1: Sources of Finance

Edit Answers
123456789101112131415
Across
  1. 2. Types of assets that are expected to keep providing benefit for more than one year, such as equipment, buildings and real estate.
  2. 4. A medium term source of finance that gives a firm the permission to rent an asset without having to purchasing it. It is generally done over a time period of 3-5 years.
  3. 8. Money that is spent on daily operations of a business.
  4. 11. Money that is spent on fixed assets that will be used for over a year and more. Examples could be building and land.
  5. 12. A factor of production. It is financial asset that is required to produce the goods or services.
  6. 13. credit A short term source of external financing generally 30-90 days. Business to business transaction. Type of commercial financing in which the seller allows the buyer to purchase goods without paying at the moment, but at a later scheduled date. The loan has no interest, the discount could be given if the people they pay earlier but extra money could be demanded if the money is paid late. It is generally more disadvantageous for the seller as they are putting the risk of trusting the buyer to pay.
  7. 14. A financial arrangement where the debt factor (third party) collects the debt owed to the business and provides the business with a percentage of the owed debt in cash payment.
  8. 15. An internal source of finance that is also known as sales of assets. Assets that are no longer required by the firm and can be sold.
Down
  1. 1. Personal capital from people who are working in the firm. Generally for sole traders, especially for starting up new businesses
  2. 3. Day-to-day finance needed to pay bills & expenses and build up stocks.
  3. 5. A type of external short term source of finance that allows a business to temporarily withdraw more money from its bank account than it has. It is commonly used when businesses have minor cash flow problems. Generally more cost-effective than bank loans even though it can demand a relatively high rate of interest due to flexibility for businesses.
  4. 6. When a firm has a “variable” need for finance.
  5. 7. Internal source of finance that is the profit left after all deductions, including dividends. This is used by the comany as a source of finance
  6. 9. A term that refers to a party that owes money to a company or individual. The person who the money is owed to is called the creditor.
  7. 10. An asset is sold to a company that makes payments over a certain time period (generally 3-5 years)