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Sources of finance
Study how businesses raise finance and judge suitable sources for different situations.
3
Objectives
10
Flashcards
10
Questions
90 min
Study time
AqaGcseBusinessFinance
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Syllabus checklist
What you need to know
3 objective pages available
Finance sources and suitability3 objectives
- Explain internal and external sources of finance, including family and friends, retained profit, share issue, loans or mortgages, selling assets, overdrafts, trade credit, hire purchase and government grants.
- Analyse advantages and disadvantages of finance methods for a given situation.
- Evaluate suitable sources of finance for new and established businesses.
Key terms
trade creditsources of financeretained profitshare issueanalyseadvantagesdisadvantagesfinanceEvaluatesuitablesources
Exam tips
- Finance sources and suitability exam tip 1: Use precise subject-specific vocabulary when you explain how to explain internal and external sources of finance, including family and friends, retained profit, share issue, loans or mortgages, selling assets, overdrafts, trade credit, hire purchase and government grants..
- Use evidence for Finance sources and suitability: Use the scenario evidence before evaluating assets, government grant, share issue, trade credit: mention SwiftServe, refer to capacity utilisation or ?7,831, and explain the effect on the operations manager.
Common mistakes
- Finance sources and suitability common mistake 1: Answer by clearly explaining how to explain internal and external sources of finance, including family and friends, retained profit, share issue, loans or mortgages, selling assets, overdrafts, trade credit, hire purchase and government grants..
- Do not turn assets, government grant, share issue, trade credit into a generic Sources of finance point: Start with the business evidence, explain how Finance sources and suitability changes the decision, then judge whether the benefit outweighs the cost or risk for MetroMove. Separate revenue versus profit before writing the final recommendation.
Practice preview
- FreshFork serves online shoppers while training staff; the case evidence includes customer retention of ?9,995, sales of 265 units, and a 32% change in costs or demand. Which option best applies Explain internal and external sources of finance, including family and friends, retained profit, share issue, loans or mortgages, selling assets, overdrafts, trade credit, hire purchase and government grants?
- PeakPods serves online shoppers while training staff; the case evidence includes customer retention of ?8,834, sales of 564 units, and a 11% change in costs or demand. Which option best applies Explain internal and external sources of finance, including family and friends, retained profit, share issue, loans or mortgages, selling assets, overdrafts, trade credit, hire purchase and government grants?
- Northline Gym serves small retailers while taking a loan; the case evidence includes capacity utilisation of ?9,746, sales of 636 units, and a 29% change in costs or demand. Which option best applies Explain internal and external sources of finance, including family and friends, retained profit, share issue, loans or mortgages, selling assets, overdrafts, trade credit, hire purchase and government grants?
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