Which word?

Credit vs. Loan

Consider the pros and cons of opening a line of credit from a bank versus securing a loan. Credit Pros: Improves cash flow and financial independence; Only have to pay interest on the amount you’ve spent, not on the total amount of credit line; Usually easier to qualify for a line of credit than for a commercial loan; Easily accessible funds for emergencies; Builds business credit; Cons: Temptation to spend beyond ability to re-pay; Potential for high interest rates; Not best-suited for buying equipment or real estate; Can become entangled with personal credit; Deepening of debt; Loans Pros: Lower interest rates than credit; Fixed borrowed amount; Better choice for making equipment, real estate and other significant purchases; Potential for credit repair or improved credit score by paying off balance; Availability for loans to be tailored to give advantages to small businesses; Cons: Acquiring approval for a bank loan is more difficult than getting a business credit line; If your business fails, it might be necessary to sell other assets to re-pay debt; Acquiring a large amount of debt at once; Not as flexible as credit; does not work to improve cash flow.

b) Translate into Ukrainian paying special attention to the words in italics.

1. He exceeded his credit limit.

2. I don’t like buying things on credit.

3. Jim took out a loan to pay for his car.

4. The bank refused to extend their credit.

5. Borrowers can take out a loan for £84,000.

6. How soon do you have to pay off the loan?

7. You can get interest-free credit on all our products.

8. The group can’t get credit to buy farming machinery.

9. Some suppliers will not give credit to their customers.

10. The country has no access to foreign loans or financial aid.

11. Kenya was still paying off a multimillion-dollar loan to the IMF.

12. The president wants to make it easier for small businesses to get bank loans.

13. You can ask a dealer for a discount whether you pay cash or buy on credit.

14. Senator Bill Bradley outlined his own tax cut, giving families $350 in tax credits per child.

15. Japan has provided about $2.5 billion in credits to Russia and about $50 million in direct aid.

Task 14. Translate into English.

1. Банк – це місце, де ми можемо тримати свої гроші у безпеці. 2. Банки впливали на економіку та політику впродовж століть. 3. Сліди банківської діяльності можна віднайти у стародавні часи. 4. Термін “банк” походить з італійської мови. 5. Перші банкіри вели свій бізнес за столами, покритими зеленими скатертинами. 6. Банківська галузь у 21 столітті є надзвичайно конкурентною. 7. Банк – це фінансова установа, яка приймає безстрокові вклади і надає комерційні позики. 8. Термін “банк” суто технічно стосується комерційного банку. 9. Ощадно-позичкові асоціації, взаємно-ощадні банки, кредитні спілки не є банками, а ощадними установами (ощадними касами). 10. Першочерговим завданням банків було надання позик торговельним компаніям. 11. Упродовж століть банки мали справу лише з торговельними підприємствами, а не споживачами. 12. Сучасні банківські послуги спрямовані також і на фізичних осіб. 13. Більшість банків – це комерційні приватні підприємства. 14. Центральні банки зазвичай перебувають у державній власності. 15. Центральні банки контролюють комерційні банки, а також касову відсоткову ставку. 16. У випадку кризи центральні банки діють як кредитори останньої інстанції. 17. Позичкова діяльність забезпечує основну частку доходів комерційного банку. 18. Банки є важливими гравцями на фінансових ринках. 19. Банки та ощадні установи зазнають багатьох форм ризику. 20. Банківські кризи виникали багаторазово впродовж історії.

Task 15. Answer the following questions.

1. What spheres of human life have banks influenced for centuries?

2. Does banking date back to ancient times?

3. Is having a bank account a commonplace these days?

4. What is the origin of the term “bank”?

5. When was the first modern bank founded?

6. What makes the banking industry highly competitive these days?

7. Why does the term “bank” technically refer only to a commercial bank?

8. What was the primary purpose of banks?

9. Has the banking industry dealt with consumers for centuries?

10. How can bank activities be divided?

11. Who does retail banking deal with?

12. What branch of banking is directed at large business entities?

13. Are there non-profits among banks?

14. What are central banks usually charged with?

15. Which banking institution acts as the lender of last resort in event of a crisis?

16. How does a bank generate a profit?

17. What activities provide the bulk of a commercial bank’s income?

18. What other financial activities do banks perform?

19. What forms of risk are banks and thrifts susceptible to?

20. Have banking crises developed many times throughout history? What are the recent examples?

Task 16. Say what you know about:

1. The origin of the word “bank”.

2. The activities of early bankers.

3. Types of financial institutions.

4. Branches of banking in the 21^st century.

5. The importance of central banks.

6. Many forms of risk banks are susceptible to.

7. The reasons and consequences of financial crises.

8. The most prominent banking crises.

Task 17. Write a composition on one of the following topics.

1. Money answers all things.

2. Of evils upon earth, money is / isn’t the worst.

3. A piggy bank vs. a bank account.

4. Banking crises: the trouble for moneybags or the overall disaster?

FINANCE AND ACCOUNTANCY

UNIT 1. FINANCE vs. FINANCES

Lesson 1

Task 1. a) The word “FINANCE” has a wide range of meanings:

Money that is used to pay for something such as a large project

b) Singular or plural?

WHICH WORD?

FINANCE vs. FINANCES

Finance [`faınænts] 81% / [faı`nænts] 19% – the system of money, credit, etc., especially with respect to government revenues and expenditures; funds or the provision of funds; Finances [`faınæntsız] / [faı`næntsız] – the money available to a person, an organization or a country; the way this money is managed.

Task 2. Translate the sentences taking into account the meanings of the word “FINANCE”:

1. Фінанси, (фінансові) засоби; управління фінансами; фінансування; фінансова система; грошові відносини; кредитування; кредит; фінансовий відділ (компанії); наука про фінанси, фінансова справа;

2. фінанси, доходи, гроші, бюджет;

1. The government’s poor management of public finance lost it the election. 2. The project will only go ahead if they can raise the necessary finance. 3. It is not yet clear where finance for the project will come from. 4. The company is searching for international sources of finance. 5. We are now trying to raise finance for more research projects. 6. The company’s finance committee is convening a meeting. 7. Students need to be taught how to handle their finances. 8. A group of banks will provide finance for the takeover. 9. He’s now studying international banking and finance. 10. The company is battling to put its finances in order. 11. To take stock of your finances means to make an inventory of your total worth. 12. The college has had to close due to lack of finance. 13. Buying new premises put a strain on our finances. 14. My finances are in a terrible mess at the moment. 15. Mr Harris is the company’s new finance chief. 16. I’ve got a diploma in banking and finance. 17. She works in the finance department. 18. Her personal finances are in a mess. 19. Finance involves the securing of funds for all phases of business operations. 20. A family budget is a working plan for allocating the family finances during the year.

Task 3. Match the phrases in column A with their Ukrainian equivalents in column B:

A	B
to put finances in order to provide finance (for) to allocate finance to handle finances to take stock (of) to raise finance	забезпечувати фінансування; залучати засоби; здійснювати (пере)облік фінансів; керувати / розпоряджатися власними коштами; контролювати власний бюджет; профінансувати (щось); привести в порядок фінанси; розміщувати, розподіляти, призначати; асигнувати фінанси;

Task 4. Think and answer.

1. Why is it important for families to take stock of their finances?

2. Who is responsible for allocating finances in your family?

3. How can a person learn to handle his / her finances?

4. What is needed to put your finances in order?

5. Have you ever raised finance for a project?

6. Who provides finance for your tuition?

Task 5. Translate into English.

1. Управління державними фінансами є важливою функцією уряду. 2. Мої фінанси у скрутному становищі (“Мої фінанси співають романси”). 3. Новий фінансовий директор з усіх сил намагається привести фінанси компанії в порядок. 4. Фінансовий комітет обговорює питання пошуку нових джерел фінансування. 5. Проект буде успішним, якщо ми зможемо забезпечити фінансування. 6. Той, хто не вміє розпоряджатися власними коштами, має мало шансів на успіх у бізнесі. 7. В університеті я вивчав банківську справу і фінанси. 8. Поки що не зрозуміло, хто забезпечить фінансування нового проекту. 9. Витрати на моє навчання в університеті позначилися на нашому сімейному бюджеті. 10. Брак фінансів у компанії ставить завдання їхнього ефективного розподілу (розміщення).

Task 6. a) The following words frequently occur in front of “FINANCE”.

mezzanine debt mortgage FINANCE public equity consumer high corporate

b) Which of the above word combinations means:

• the business of lending money to customers so that they can buy goods to pay for them later;

• the activity of helping companies to get the money they need in order to run and develop their business;

• a field of economics concerned with paying for collective or governmental activities;

• money that a company borrows from banks, investors, etc. in order to finance its activities; the business of providing this money to companies;

• money that a company gets by selling shares in order to finance its activities; the business of helping companies get money in this way;

• business activities which involve very large amounts of money;

• a way of providing funds for a business that involves lending money with a high rate of interest and often with the right to obtain shares in the business in the future;

• money lent to people or organizations to buy property?

Task 7. a) Match the terms in column A with their translation in column B:

A

B

mezzanine finance corporate finance consumer finance mortgage finance public finance equity finance debt finance high finance

споживчий кредит; державні фінанси, державний бюджет; мезонінне (проміжне) фінансування; субордино-ваний борг; іпотечне фінансування; рефінансування іпотеч-ної заборгованості; великі (значні) фінансові операції; фінансова аристократія; велике шахрайство; корпоративне фінансування; корпоративні фінан-си; фінанси підприємств / компаній / приватних корпорацій; боргове фінансування; кредитне фінансування; кредитування; фінансування боргу; фінансування шляхом залучення позикових коштів; фінансування проектів за рахунок випуску нових акцій; фінансування за рахунок власного капіта-лу; фінансування проекту шляхом вливання акціонерного капіталу; фінансування шляхом участі на паях у капіталі;

b) Translate into Ukrainian paying special attention to the words in italics.

1. The proper role of government provides a starting point for the analysis of public finance. 2. Public finance is closely connected to issues of income distribution and social equity. 3. Consumer finance in the most basic sense of the word refers to any kind of lending to consumers. 4. Consumer finance can include just about any type of lending activity that results in the extension of credit to a consumer. 5. The retailer wants to sell off its consumer finance unit. 6. Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. 7. The primary goal of corporate finance is to maximize corporate value while managing the firm’s financial risks. 8. He followed a career in corporate finance. 9. He joined the corporate finance arm (= department) of KPMG in 2008. 10. It is now more difficult for smaller companies to attract investors and raise equity finance. 11. The bank’s equity finance division is expanding its activities. 12. The two main providers of equity finance for private businesses are venture capitalists – also known as private equity firms – and business angels. 13. Equity finance is a way of raising share capital from external investors in return for handing over a share of the business. 14. The company has secured debt finance from Royal Bank of Scotland to fund the deal. 15. She is head of the bank’s debt finance division. 16. Debt finance is achieved via agreed extended credit terms with your suppliers, provided that you have a close relationship with them. 17. Investment in the future expansion of the gas industry worldwide will depend on a combination of private equity finance, state-provided capital, and commercial debt finance. 18. It’s not easy to enter the world of high finance. 19. They’re a big name in high finance. 20. Mezzanine finance carries more risk for the lender and is more expensive to the borrower than ordinary loans. 21. Mezzanine [`metsəni:n] / [`mezəni:n] finance is used to describe forms of finance that have characteristics of both debt and equity. 22. Mezzanine [`metsəni:n] / [`mezəni:n] finance can be particularly useful to fast growth companies. 23. Mortgage [`mO:gıG] finance is finance for investment in buying, building, reconstructing or improving building and administrative units. 24. One of the advantages of mortgage [`mO:gıG] finance is the longest payment period as compared to other systems. 25. The news reported bankruptcy of another mortgage [`mO:gıG] finance giant.

Task 8. Try to make difference between the following interrelated concepts.

1. What is money? Which forms can it take?

2. Is money and capital the same thing? Which money is called capital?

3. Is the money you possess your capital? Can capital take any form of material wealth (including movable property and real estate)?

4. How does capital differ from finance?

5. What is the difference between “finance” and “finances”?

Task 9. a) Study the following words