Sources Of Finance

Front 1

Overdraft

Back 1

- Short term use.
- Operates through cheque account with upper limit set by the source.
- Interest is charged on an over-drawn amount.
- On-going use.
- Relatively high interest rate.
- Usual sources: Banks.

Front 2

Trade Credit

Back 2

- Short term use for full settlement between 7-60 days.
- Established via each supplier.
- No interest charged.
- Allows for purchase of stock to meet orders.
- Usual sources: Trade suppliers as negotiated.

Front 3

Government Loans/Venture Capital

Back 3

- Medium/Long-term use.
- Large amounts of finance ($100,000 - $500,000).
- For incorporated businesses only.
- Interest rates and repayments can be 'packaged' in different ways.
- Usual sources: Government organisations such as AusTrade and R&D departments.

Front 4

Hire Purchase

Back 4

- Short/Medium-term use.
- Used for high-cost items such as motor vehicle, furniture and equipment.
- Relatively high interest rate built into ongoing repayments.
- Ownership retained by hirer but transfers on completion of payments.
- Usual sources: Banks, Finance companies, Dealers and suppliers.