Alternative transcript:

be used to make larger purchases, such as assets or for bulk buying. The business doesn't go in to debt. Venture capital is money that investors provide to a company that is starting up or expanding. Venture capital is usually used when there is an element of risk with the business. Money can be raised from the sale of an asset to boost cash flow. Small amounts of money from a large number of people are raised to fund new business or project. Crowd Funding usually done through the Internet Finance raised does not need to be paid back Large amounts of finance can be raised A commercial mortgage is a long term source of finance. It is a sum of money borrowed from the bank that is secured against a business property and paid back in instalments, usually over a long period of time. Sources of Finance The business can budget for the repayments. purchases of essential equipment can be made in advance and paid back over a number of years Debentures are loans given to the business by individuals. Interest is paid annually and the loan is paid back in full at an agreed date in the Control of the business is retained future. Mortgage is given for a long period of time Large amounts of finance can be raised quickly Advantages Time and effort is saved as the company is no longer required to recover unpaid debts these can be paid back over a long period of time Does not need to be paid back These are often offered as an incentive way of helping a business get started or expand Large amounts of investment can be gained. venture capitalists are willing to take on more risky investments than banks finance can be raised from individuals when banks see a venture as too risky. some funds are donated so there is nothing to repay. Disadvantages For profits to build up to use in this way can take too long and good business opportunities missed Finance If the finance is required urgently, the business may have to sell the asset for less than it is worth. owne Shareholders need to be paid a dividend each year Shareholders become part the Interest has to be repaid along with the loan amount. small businesses may find it more difficult to secure a loan and often need to pay higher interest rates as they are greater risk Interest is charged on the loan Property can be lost to the mortgage lender if repayments are missed Finance Disadvantages Money is lost from the business as unpaid debts are sold at a reduced value Interest must be paid even if the company makes a loss Business needs to meet certain criteria It is time-consuming to apply for grants and to complete the paperwork Venture capitalists have an equity stake which means control and a share of profits are given up A public request for investment risks your project being copied by competitors If the targeted amount isn't reached the money is returned to investors and the business gets nothing