Summer Test on Finance

A facility where a bank allows its customers who have a current account to withdraw more money from their account than they have in it up to an agreed limit. Factoring Bank Overdraft Medium Term Loan A customer pays for goods and services using this at the point of sale. The customer pays back at a later date within an agreed timeframe. Bank Overdraft Hire Purchase Credit Card Another name for renting where regular payments are made for an agreed period of time while using the asset between 1 - 5 years. e.g. machine Factoring Leasing Hire Purchase Used to purchase property and required to be paid back between 20 - 35 years along with fixed or variable rate of interest. Debentures Mortgage Equity Firm invest money into new businesses where there is potential for a high return on their investment. e.g. Dragon's Den Equity Venture Capital Grant Another name for security. Assets Collateral Protection Term used to describe the ability of a business to pay its debts as they fall due. Factoring Liquidity Collateral This is where the lender checks the borrowers credit history e.g. Stubbs Gazette, Trade or Bank Reference. Credit Reference Credit Worthiness Trade Reference This is a financial plan that shows the business how much it expects to receive and spend over the period of time. Budget Cashflow Forecast Financial Estimates Factors to consider when choosing finance are Cost Purpose Security Credit Worthiness Bank service used to pay wages electronically to employees. Pay Pal Pay Path Credit Transfer The supplier allows the business or household to use their service and pay later e.g. electricity or gas. Factoring Trade Credit Accrued Expenses Financial Institutions such as banks and credit unions consider the following factors when deciding on granting finance; Collateral, Capital, Capacity, Creditworthiness. Collateral, Character, Capacity, Creditworthiness. Collateral, Character, Capacity, Credit. Collateral, Character, Credit , Creditworthiness. Profits that a business has saved over time and reinvests it back into the business. e.g. expansion. Dividends Share Capital Retained Earnings A long term debt finance where assets are used as security and it is with fixed interest rates. Mortgage Debentures Venture Capital Cashflow Forecast Please ignore the questions underneath the image justPlease fill in the missing figures: (40,000) (30,000) 20,000 State four ways of how Cast Ltd might deal with the financial problems identified in the cash flow forecast. This is an open ended question.