Sources of Business Finance
Every business needs money to start and grow. Sort the short-term sources from the long-term, match each to what it is, and choose the right finance for a business situation.
Revise this, the fun way
Play it interactively, earn XP and build a streak, free.
Start revising freeWhat you'll cover
Where does the money come from? 💰
Starting and growing a business takes money. That money is called a **source of finance**, and there are many to choose from. Some are **short-term**, for a quick cash gap; others are **long-term**, for lasting investment. This module sorts them out and matches each to the right situation.
The language of finance 🔑
Four ideas run through this module:
Short-term and long-term ⚖️
Sources of finance split into two families, depending on how long the money is needed.
Match each source to its meaning 🔗
- Overdraft
- Trade credit
- Retained profit
- Crowdfunding
- Borrowing more than is in the bank account
- Buying now and paying the supplier later
- Profit kept back and reinvested
- Many people each giving a small amount online
Spot the short-term source ⏳
Which of these is a SHORT-TERM source of finance?
- An overdraft
- A ten-year bank loan
- Share capital
- Retained profit
Bringing in outside money 🏦
For bigger, long-term needs a business can look outside. A **bank loan** is borrowed and repaid with **interest** over several years. **Venture capital** is money from an investor in return for a share of the business, often with advice too. **Share capital** is raised by selling **shares**. **Crowdfunding** gathers small amounts from many people online.
Match each long-term source 🤝
- Personal savings
- Venture capital
- Share capital
- Bank loan
- The owner's own money put into the business
- An investor's money in return for a share
- Money raised by selling shares
- Money borrowed and repaid with interest
Spot the long-term sources 📊
Select the TWO LONG-TERM sources of finance.
- A bank loan
- Retained profit
- An overdraft
- Trade credit
Finance in words 🧩
Money a business gets to start or grow is a _____ of finance. An _____ is short-term borrowing from a bank. Buying now and paying the supplier later is _____ credit. A bank _____ is repaid over years with interest. Profit kept back and reinvested is called _____ profit.
How to choose a source 🪜
An interactive activity.
Funding a brand-new business 🌱
A brand-new start-up has no track record and no past profit. Which source is a founder most likely to use to get going?
- Personal savings, their own money
- Retained profit from past years
- A large long-term bank loan
- Selling shares on the stock market
Spot the true statements 🖍️
An interactive activity.
Choose the finance 🧭
An interactive activity.
Recommend a source ✍️
An interactive activity.