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rate, depending on the level of risk. Note
also that arrangement fees can have a
substantial impact on the cost of an overdraft.
The interest charged and any arrangement fee
for an overdraft is negotiable. The chief
disadvantage of an overdraft is that it is
theoretically repayable on demand and this is
another reason why it is only suitable for
financing assets that can quickly be turned
into cash. Lessor:
A person who leases out property or assets.
An investigation of a company experiencing
severe cash flow problems to determine the
factors which have caused the cash flow
problems and to assess the continued
viability of the business.
Loan guarantee scheme:
The Small Firms Loan Guarantee Scheme is
available to help viable businesses obtain
debt finance even though they may lack
An arrangement whereby a team of outside
managers purchase a business, with funding
provided by a group of financial backers. Newco:
A newly formed company set up as an
acquisition vehicle, for example, in a
management buy-out. Prospectus:
A document offering shares or debentures in
a company to the public for subscription or
An incentive arrangement whereby a number
of trigger points for future profits are set such
that the managers get a bigger share of the
equity if the company performs well and a
lesser share if it performs badly.
Retention of title:
The retention by a seller of goods of legal
title to the goods until they have been paid
for, even though possession of the goods is
given to the buyer before that time.
15 Sources of Venture Capital under £250,000 Seed Capital:
See Venture capital. In particular, seed
capital is the term given to providing finance
for the development of ideas into products. Other Contacts Sensitivity analysis:
Analysis of the sensitivity of predicted
results to changes in the underlying
assumptions. Small Business Service (DTI Term loan:
A loan for a fixed amount with a fixed
repayment schedule normally from a bank. It
is most suitable for funding fixed assets and
core borrowing. Although the interest rate
may he slightly less than on an overdraft
there is no opportunity to flex the amount of
financing. When the level of financing
required is likely to go up and down it is
important to choose a form of finance which
does not require you to pay for funds you are
not using. Therefore a term loan is suitable
for fixed assets, but not for working capital.
The key advantages of a term loan are that
you know when the repayments are and can
budget accordingly and the APR may be
lower. Small businesses looking for venture capital
might also find it helpful to speak to the
Tel: 0207 215 5000 British Venture Capital Association
Tel: 0207 025 2950 Local Investment Networking
Tel: 0141 221 3321 Venture Capital Report
Tel: 0207 907 2900 Unincorporated:
A form of business that is not a company
(normally a sole trader or a partnership).
The concept of adding value to investments
by participating in the ma...
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- Summer '12