Financing a business, and financial records

Every business needs money to start and to grow. Short-term financing is usually repaid within a year and pays for day-to-day needs such as stock. Long-term financing is repaid over many years and pays for buildings and machinery. Paper 1 asks what a debenture holder is entitled to: a fixed rate of interest whether or not the company makes a profit.

By the end of this page you can

• Tell short-term and long-term financing apart
• Say what each financial statement shows
• List personal sources of capital
• Choose finance to suit a business need

Goals tick themselves off as you try the activities below.

Photo: Unknown author, Public domain, via Wikimedia Commons. Cropped, resized, JPEG q74.

Selling shares raises long-term capital: each certificate proves a part-owner’s stake.