9 Raising Finance

raise finance	залучати фінанси	retained profit	нерозподілений прибуток
run costs	керувати, управляти витратами	borrowing	позика (коштів); кредит
financial reserves	фінансові резерви	loan	позика
extra capital	додатковий капітал	tax	податок
premises	приміщення; будинок з прилег- лими будівлями і ділянкою	grant	дотація; субсидія, грант; грошова допомога
working capital	оборотний капітал; оборотні фонди	leasing time-lag	лізинг, довгострокова оренда відставання в часі; спізнення
preserve	зберігати; підтримувати	lender	кредитор, позикодавець
cash flow	потік готівки	distribute	розподіляти; роздавати
hire purchase	купівля у розстрочку	share issue / flotation / offering	розміщення, випуск нових цін-них паперів на вільний ринок
debt factoring	борговий факторинг

All firms need capital to stay in business. As well as money for funning costs such as wages, material and rent, they need to have financial reserves. Extra capital may be needed to expand by buying new premises or developing new products. Firms may also need working capital to preserve cash flow through the business, for instance if there is time-lag between producing goods and services and getting paid for them.

There are four main ways of obtaining capital:

* retained profit

* borrowing

* share issues

* government grants and loans

Retained profit is the amount of profit after tax that directors of a business decide not to distribute to their shareholders, but to keep within the business.

Borrowing money usually accounts for 20-30 percent of firms' capital. There are several types of lenders to business: commercial banks, leasing, hire purchase, debt factoring, the Stock Exchange.

When companies raise finance by selling shares for the first time they make share issues, share flotations or share offerings.

The government has a variety of schemes which give grants or cheap loans to firms for certain purposes.

1 What do businesses need financial reserves for? 2 What do companies need working capital for? 3 What are the four main ways of obtaining capital? 4 What is meant by the "retained profit"? 5 Is retained profit distributed to shareholders? 6 What are the main types of lenders to business? 7 When do companies make share flotations?

1 Match words that have a similar meaning:

share flotation creditor hire purchase shareholder profit obtain preserve buy expand

stockholder instalment plan lender share offering purchase earnings enlarge keep get

2 Match the words and phrases in the box with the correct definition: 1) money as a resource for business and other activi-ties; 2) the capital from a business that is set aside from profit or from shares sold at higher than their original price; 3) the amount of money moving into and out of a

business at a particular point in time; 4) part of the annual profit that is not paid out to shareholders as dividend, but reinvested in the company; 5) receiving money from a person, a bank, or other financial organization and agreeing to pay it back later, usually with interest; 6) money that has been borrowed and has to be paid back; 7) a person or an organization that lends money and charges interest on the repayments;

8) a way of buying goods where the buyer takes the goods and pays for them in regular instalments over a fixed period of time; 9) offering company shares for sale to the public or on a stock exchange for the first time; 10) the amount of short-term capital that a business has available to meet the day-to-day cash requirements of its operations; 11) money given for a specific purpose; 12) buildings and the land they occupy.