FINANCE - Borrowing money

Pre-discussion

1. Put students in pairs. Tell them to imagine the following scenario: The directors at your company want to invest the revenue to start another venture. This is what they say. Which of these opinions do you agree with? Why?

“Try and look for a business angel.”

“Apply for a traditional bank loan.”

“Apply for a loan from a peer-to-peer* scheme.”

“Invest time, not money; try and set up the company without going into debt.”

Discussion

2. Ask students to look at the responses below. Are any the same as they discussed?

“It’s hard to find a business angel.”

“Bank loans are expensive.”

“Isn’t a peer-to-peer scheme risky?”

“I just don’t have the free time to invest!”

*Peer-to-peer scheme: people who have spare money lend it to people who want to borrow. A recent development in obtaining low-cost loans.

3. Have students discuss the best way to secure financing for a new business.