1.3.4 Sources of business finance - Word Drop

Short-term finance helps a business pay suppliers and employees, usually for up to about three months. An ______ is when a bank allows a business to take out more money than is in its account, but a fee and interest are charged and repayment can be demanded at short notice. ______ means a supplier lets a business pay for raw materials at a later date, which improves cash flow.

Long-term finance is needed for periods of years, such as expansion. A sole trader may use ______, but this uses up a contingency fund and loses potential interest. ______ comes from private investors who provide money and advice in return for some control. Share capital is raised by selling shares to ______, who own a portion of the company but dilute control, although the money does not have to be repaid. A ______ from a bank is repaid over a set period with interest and often requires an asset as security, but the business keeps full control. ______ is profit saved from previous years and is not reliable every year. ______ raises small amounts from many people, often quickly, and can test public reaction, but needs a lot of work to build interest.