Two brothers, Ken and Alex, run a family-owned removals company called Ted Moves It Ltd based in Staffordshire which is currently facing liquidity problems and needs an injection of funds.
From the following list of sources of finance available to the company, identify which would be classified as a source of short-term finance?
Select ONE answer:
- Share capital
- Bank Loan
- Factoring
- Commercial mortgage
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 3
- Not correct
- Not correct
- Correct == > Short-term funds are those used to cover normal operations and can be taken to mean finance available for up to one year. An example is debt factoring. Bank loans and mortgages are debt finance provided for more than one year, while share capital is equity finance that is also provided for more than one year.
- Not correct
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