Which of the following is the most suitable source of finance for a café setting up as a sole trader?
Owners’ capital
Issuing shares to new shareholders
Retained profit
Which of these is an example of a long-term source of finance suitable for a sole trader?
Bank loan
Trade credit
Overdraft
How could a business overcome a short-term cash flow problem?
Sell more shares
Get an overdraft
Take out a bank loan
Which of the following describes trade credit?
Paying for stock or goods straight away
Waiting until all goods have been sold before paying a supplier
Paying for stock or goods at an agreed later date, usually 30, 60 or 90 days
Which of the following would prevent a business from obtaining finance?
Having a business plan
Having a poor financial track record
Have a good credit rating
Which of the following is a disadvantage of a bank loan?
Fixed repayments
Can be over a short, medium or long time period
Interest payments
Which ownership type can sell shares?
Sole trader
Limited company
Partnership
Which of these is an advantage of crowd funding?
Crowd funding websites allow people to invest small amounts, potentially increasing the chances of investment
Investors need to be offered a return on their investment
The business idea may not be of interest and so may attract little finance
Which of these is not a reason for needing finance?
To expand
To start up a business
To retain profits
Which of these is a disadvantage of trying to sell an asset?
The business might not find anyone to buy the asset
The asset is no longer used by the business
It can be a cost-free source of finance