SOURCES OF MONEY (TRADE CREDIT AND EQUITY CAPITAL)

TRADE CREDIT AND SMALL BUSINESSES

Trade credit is credit extended by suppliers. It is usually the first source of extra capital that the small business owner turns to when the need arises.

Informal Extensions. Frequently, this is done with no formal planning by the business. Suppliers' invoices are simply allowed to "wait" for another 30 to 60 days. Unfortunately, this can lead to a number of problems. Suppliers may promptly terminate credit and refuse to deliver until the account is settled, thus denying the business access to needed supplies, materials, or inventory. Or, suppliers might put the business on a cash on delivery (C.O.D.) basis, requiring that all shipments be fully paid in cash immediately upon receipt. At a time when a business is in need for cash, this requirement could have the same effect as cutting off deliveries all together.

Planning Advantages. A planned program of trade credit extensions can often help the business secure extra capital that it needs without recourse to lenders. This is particularly true whenever the capital need is relatively small or short in duration.

A planned approach should involve the following:

1. Take full advantage of available payment terms. If no cash discount is offered and payment is due on the 30th day, do not make any payments before the 30th day.

2. Whenever possible, negotiate extended payment terms with suppliers. For example, if a supplier's normal payment terms are net 30 days from the receipt of goods, these could be extended to net 30 days from the end of the month. This effectively gives an average of 15 extra days.

3. If the business feels that it needs a substantial increase in time, say 60 to 90 days, it should inform suppliers of this need. They will often be willing to accept it, provided that the business is faithful and makes payments at the later date.

4. Consider the effect of cash discounts and delinquency penalties for late payment Frequently, the added cost of trade credit may be far more expensive than the cost of alternate financing such as a short-term bank loan.

5. Consider the possibility of signing a note for each shipment promising payment at a specific later date. Such a note, which may or may not be interest-bearing, would give the supplier evidence of your intent to pay and increase the supplier's confidence in your business.

Ready Availability. Trade credit is often available to businesses on a relatively informal basis without the requirements for application, negotiation, auditing, and legal assistance often necessary with other capital sources.

I Грамматические упражнения

Переведите на русский язык следующие слова:

trade cash

supplier bank

invoice shipment

account receipt

term recourse

Переведите следующие словосочетания на английский язык:

предоставлять кредит
урегулированный счет
платить наличными
скидка при оплате наличными
штраф за неоплату счета в срок

3. Выпишите из текста 4-5 предложений, сказуемые которых выражены формой глагола “to be”. Переведите предложения на русский язык.

4. Выпишите из текста 4-5 предложений, сказуемые которых выражены модальными глаголами.

Дайте II и III формы следующих неправильных глаголов:

to sit

to mean

to put

to run

to shake

Образуйте II и III степени сравнения следующих прилагательных:

available

nice

good

readable

late

Переведите на английский язык предложения:

Торговый кредит зачастую доступен организациям на неформальной основе без требования при обращении за кредитом.
Юридическая помощь необходима при привлечении других финансовых источников.
Поставка товара будет произведена в двух недельный срок.
Мы не ознакомились с условиями оплаты.

8. образуйте отрицательную и вопросительную формы следующих предложений. Определите время и категорию каждого предложения, подчеркните подлежащее и сказуемое. Переведите предложения на русский язык.

It needs a substantial increase in time.
This was particularly true whenever the capital need was relatively small or short in duration.
They will often be willing to accept it.

Ответьте на вопросы по тексту контрольной работы:

What is trade credit?
What are cash on delivery requirements?
How payment terms can help secure extra capital?
How to use extended payment terms with suppliers?

Переведите текст контрольной работы на русский язык письменно.

II Фонетические упражнения

Найдите в тексте по 5 слов, где:

i [i] th [ð]

or [o:] t [∫]

Протранскрибируйте следующие слова:

added

delivery

recourse

negotiation

auditing

Вариант

DEBT - TYPES & AVAILABILITY

Debt capital. Debt is an amount of money borrowed from a creditor. The amount borrowed is usually evidenced by a note, signed by the borrower, agreeing to repay the principal amount borrowed plus interest on some predetermined basis.

Borrowing Term. The terms under which money is borrowed may vary widely. Short-term notes can be issued for periods as brief as 10 days to fill an immediate need. Long-term notes can be issued for a period of several years.

Discounted Notes. In some case, particularly in short-term borrowing, the total amount of interest due over the term of the note is deducted from the principal before the proceeds are issued to the borrower. Such a note is called a discounted note.

Short-term Borrowing.

Short-term borrowing usually requires repayment within 60 to 90 days. Notes are often renewed, in whole or in part, on the due date, provided that the borrower has lived up to the obligations of the original agreement and the business is a good lending risk.

Lines of Credit. When a business has established itself as being worthy of short-term credit, and the amount needed fluctuates from time to time, banks will often establish a line of credit with the business. The line of credit is the maximum amount that the business can borrow at any one time. The exact amount borrowed can vary according to the needs of the business but cannot exceed its established credit line.

These arrangements give the business access to its requirements up to the credit limit or line. However, the business pays interest only on the actual amount borrowed, not the entire line of credit available to it.

Long-term Debt. Long-term debt is borrowing for a period greater than one year. This general classification includes "intermediate debt'' which is borrowing for periods of one to 10 years.

Repayment Schedules.

When the terms of a debt are negotiated, a payment schedule is established for both interest obligations and principal repayment. The dates on which principal and interest payments are due should be scheduled carefully.

Mortgage Loan Repayment Schedules. Principal and interest payments on mortgages usually involve uniform monthly payments that include both principal and interest. Each successive monthly payment reduces the amount of principal outstanding. Therefore, the amount of interest owed decreases and the portion of the monthly payment applicable to principal increases. In the early years of a mortgage, the portion of the monthly payment applied against the principal is relatively small, but grows with each payment.

Term Loan Payment Schedules. For term loans, payment of principal and interest is ordinarily scheduled on an annual, semiannual or quarterly basis.

For example, a 5-year, $50,000 term note bearing 10% interest might have the following payment schedule specified in the note agreement:

End of Year	Principal Repayment	Principal Outstanding	Interest Payment at 10%
1st year	$10,000	$50,000	$5,000
2nd year	$10,000	$40,000	$4,000
3d year	$10,000	$30,000	$3,000
4th year	$10,000	$20,000	$2,000
5th year	$10,000	$10,000	$1,000

Availability of short-term loans. Commercial banks are the ordinary source of short-term loans for the small business. For small businesses, borrowed capital for periods greater than 10 years is usually available only on real estate mortgages. Other long-term borrowing usually falls into the "intermediate" classification and is available for periods up to 10 years. Such loans are called "term loans". The type and term of the loan should be based on the purpose for which the funds will be used.

I Грамматические упражнения

1. Переведите на русский язык следующие слова:

discount to deduct

amount date

borrower to fluctuate

interest annual

issue semiannual

2. Переведите на английский язык следующие словосочетания:

1. привлеченный капитал

2. сумма займа

3. срок займа

4. срок платежа

5. приносящий проценты

4. Выпишите из текста 4-5 предложений в пассивном залоге (Passive Voice). Подчеркните сказуемое и переведите предложения на русский язык.

5. Дайте II и III формы следующих неправильных глаголов:

to mow

to mistake

to shed

to grind

to hurt

6. Задайте 4 типа вопроса к следующим предложениям:

1. Principal and interest payments on mortgages involve uniform monthly payments.

2. Commercial banks are the ordinary source of short-term loans for the small business.

3. Debt is an amount of money borrowed from a creditor.

7. Выпишите из текста 4-5 предложений с неличной формой глагола (Infinitive). Переведите предложения на русский язык.

8. Образуйте II и III степени сравнения следующих прилагательных:

bad

popular

nice

far

many

9. Ответьте на вопросы по тексту контрольной работы:

1. What documents are issued when borrowings are made?

2. What are the types of borrowings?

3. What is a discounted note?

4. What is a line credit in a bank?

5. What loans are called “term loans”?

10. Переведите текст контрольной работы на русский язык письменно.

II Фонетические упражнения

Найдите в тексте по 5 слов, где:

u [۸] s [z]

er [ε:] g [g]

Протранскрибируйте следующие слова:

schedule

principal

to include

long-term

repayment

Вариант

Banks are organizations that carry out the business of banking, taking deposits and then using those deposits to make loans. In essence, a bank aims to make a profit by paying depositors a lower rate of interest than the rate the bank charges borrowers. In accounting terms, deposits are considered liabilities (because they have to be repaid), and loans are considered assets.

Banks in most countries are supervised by a central bank, such as the Bank of England in the United Kingdom, the Bundesbank in Germany, the Federal Reserve System in the United States and Central Bank in Russia.

There are many different types of bank, and the banking structure varies from one country to another. Banks can fall into the following categories:

Retail banks are often referred to as commercial banks. In addition to conventional banking services, such as the provision of checking accounts, they deal in foreign exchange, issue credit cards, provide investment and tax advice, and sell financial products such as insurance. In the United Kingdom the biggest retail banks (by assets) are Barclays Bank, National Westminster Bank, Midland Bank, Abbey National Bank and Lloyds Bank.

Merchant or investment banks act as intermediaries between investors and private or public concerns seeking medium to long-term funds, often acting as underwriters for an issue of shares. Increasingly they have played a fundamental role in advising on mergers and acquisitions, and on management buy-outs. In the United Kingdom, some of the longest established and best-known merchant banks are still privately owned.

Building societies were set up in the United Kingdom to take deposits in order to provide long-term loans (mortgages) to homebuyers. They are owned by their members (those who have deposited money with or borrowed money from them).

Savings Banks were set up with the aim of attracting small savers. They resemble retail banks in the services they provide.

Credit unions are the equivalents of savings banks, and are run as a cooperative nonprofit-making organization. Credit unions are widespread in the United States. France's biggest bank, Credit Agricole, is essentially a federation of more than 3,000 credit unions.

Universal banks do everything that the above types of banks do.

I Грамматические упражнения

Переведите на русский язык следующие слова:

checking retail

rate underwriter

interest to issue

liability share

asset merger

Переведите на английский язык следующие словосочетания:

специальный счет
процентная ставка
банк, занимающийся обслуживанием мелкой клиентуры
выпуск акций
выкуп права на управление

Дайте II и III формы следующих неправильных глаголов:

to cling

to dare

to fall

to forget

to gild

5. Выпишите из текста 4-5 предложений в пассивном залоге (Passive Voice). Подчеркните сказуемое, переведите предложения на русский язык.

6. Образуйте отрицательную и вопросительную формы следующих предложений. Определите время и категорию каждого предложения, подчеркните подлежащее и сказуемое, переведите предложения на русский язык:

There are many different types of banks.
Increasingly they played a fundamental role in advising on mergers.
They will be set up with the aim of attracting small savers.

Задайте 4 типа вопроса к следующим предложениям:

You need to have a checking account beforehand.
Bank can fall into several categories.
We had a number of intermediaries.

образуйте II и III степени сравнения следующих прилагательных:

comfortable

small

convenient

much

good

Ответьте на вопросы по тексту контрольной работы:

What does banking businesses consist of?
What are the aims of banks?
What are the types of banks?
What are the activities of different types of banks?

Переведите текст контрольной работы на русский язык письменно.

II Фонетические упражнения

Найдите в тексте по 5 слов, где:

ea [i:] a [æ]

i [ai] e [e]

Протранскрибируйте следующие слова:

to refer

to carry out

category

organization

society

Вариант

The banking industry has greatly changed nowadays due to bank mergers and acquisitions. In this new environment banks have to offer more services. The increase in services leads to bank charges for almost everything. Banks are charging now for ATM {automatic teller ma chine) transactions, not maintaining a minimum balance, teller usage, phone transactions, monthly service charges, and per check charges. Many banks also require an initial high deposit. They may also set a limit on the number of checks you can process each month. A charge applies for each check above the limit.

Banks give you an option to reduce your bank charges by maintaining a minimum balance. You will need to evaluate whether this option suits your needs. Each bank offers a different array of bank account options. You will need to study each bank's service options to decide what options are crucial for your business. Some issues to consider are the interest rates, usage of ATMs, convenience, service, FDIC insurance availability, minimum balance requirements, and bank fees.

Here's a list of options to consider:

• Usage of ATM Machines Each time you withdraw money from your bank's ATM machine, you may be paying a charge. Also, consider the availability of your bank's ATM machines. If you use another bank's ATM machine, you may have to pay a charge for both banks' services (that means your bank and the bank that owns the ATM machine).

• Convenience. Most banks offer online banking services. What does this mean? You have the ability to pay for bills, transfer money from one account to another, purchase stocks in from your work or home. This gives you twenty-four hours access to your accounts, seven days a week!

• Minimum monthly balances or a service charge. Depending upon the minimum balance requirement and your cash situation, you may opt to pay a monthly service charge. If the balance requirement is high, then it may be to your advantage to place your money in a higher interest bearing account and pay for a monthly service charge. You may need to calculate which option is best for you.

• Per Check fee. In most businesses, a per check fee account would be detrimental so they stay away from this type of account.

• Interest rates. Make sure that your checking account also gives you interest. The rate may not be very high, but it still helps!

Another option instead of using a bank is a credit union. Most credit unions are set up for a specific type of employee or business. There are credit unions that cater to educational institutions, employees of hospitals, and other specific groups. Credit unions offer very similar banking services such as the use of ATM cards, low minimum balance requirements, and low or no per check charges.

I Грамматические упражнения

Переведите на русский язык следующие слова:

merger teller

usage balance

transaction check

charge insurance

service fee

Переведите на английский язык следующие словосочетания:

банкомат
поддерживать минимальный остаток
плата за операцию
плата за обналичивание чека
ставки процента

4. Выпишите из текста 4-5 предложений, сказуемые которых употреблены в простом настоящем времени, 3 лице, ед. числе (Present Simple).

Дайте II и III формы следующих неправильных глаголов:

to cut

to deal

to flee

to grow

to keep

6. Образуйте II и III степени сравнения следующих прилагательных:

beautiful

quiet

outstanding

marvelous

far

7. Задайте 4 типа вопроса к следующим предложениям:

1. The banking industry has greatly changed nowadays due to bank mergers and acquisitions.

2. There are a lot of ATMs in our town.

3. Interest rates are rather small this session.

8. Выпишите из текста 4-5 предложений с неличной формой глагола (Infinitive). Переведите предложения на русский язык.

9. Ответьте на вопросы по тексту контрольной работы:

1. What are bank charges? What are banks charging for?

2. What are the options in banks’ services?

3. What are credit unions?

10. Переведите текст контрольной работы на русский язык письменно.

II Фонетические упражнения

1. Найдите в тексте по 5 слов, где:

s [∫] ar [a:]

o [o] a [ei]

2. Протранскрибируйте следующие слова:

carter

detrimental

to opt

fee

bearing

Литература

Основная:

К.Э. Эккерли Учебник английского языка. «Русская версия», 2014.

И.П. Арабекян English for Economists. Английский для экономистов: учебное пособие. – М.: ТК Велби, Изд-во Проспект, 2016. – 352 с.

Антонова, С.В. Английский язык для направления подготовки "Товароведение": Учебное пособие / С.В. Антонова. - СПб.: Лань, 2014. - 192 c.

Купцова, А.К. Английский язык для менеджеров и логистов: Учебник и практикум для СПО / А.К. Купцова, Л.А. Козлова, Ю.П. Волынец. - Люберцы: Юрайт, 2016. - 348 c.

Дополнительная:

Т.В. Барановская Грамматика английского языка Сборник упражнений. – М.: ЗАО «Славянский дом книги», 2014. – 384 с.

К.Н. Качалова, Е.Е. Израилевич Практическая грамматика английского языка. БАЗИС, КАРО, 2015.

Raymond Murphy English Grammar in Use. Cambridge University Press, 2012

Студент должен знать: лексику в рамках изучаемого материала, основы

английской грамматики, формы неправильных глаголов, правила транскибирования английских слов.

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