Long term and Short term

Sources of finance
Starter
• There must be sufficient finance to pay for the daily running of
the business. This money is known as

a) Working capital
b) Work-in-progress
c) Retained profit
d) Buffer stocks
.

• There must be sufficient finance to pay for the daily running of

the business. This money is known as
a) Working capital
b) Work-in-progress
c) Retained profit
d) Buffer stocks
.

Debentures can best be described as a form of

a) Short-term loan with variable interest rates
b) Medium-term loan with variable interest rates
c) Long-term loan with a fixed interest rate
d) Long term security giving the holder part ownership of the
business
.

Debentures can best be described as a form of

a) Short-term loan with variable interest rates
b) Medium-term loan with variable interest rates
c) Long-term loan with a fixed interest rate
d) Long term security giving the holder part ownership of the
business
Lesson Objectives
• To understand the concepts of short term and long term sources
of funds
.
Plenary
• Can you remember the concepts that we learned today?

• Any Questions?
Starter
Lesson Objectives
• How Businesses make the choice?

• What factors do managers consider before deciding where to

obtain finance from?
Factors
1) Purpose and Time Period

2) Amount needed

3) Legal form and size

4) Control
• Michelle lost her job when the sugar factory closed. She wanted
.

to start her own business designing and making clothes. She

has prepared several dress designs which she thinks are better
than anything else on the market. All the main banks refused
Michelle’s request for a $100 loan, even though she had a
business plan. Michelle did not want to use a crowdfunding
platform. Finally, a development bank specialising in micro-
finance agreed to lend her the capital she needed. That was
three years ago – she now employs three other people and is
planning further expansion of her business.
• 1) Define Micro finance (2)
• 2) Michelle now wants to expand her business further. Explain
two benefits of using internal sources of finance to pay for this
(6)