Active learning ideas
Where does the money come from? This topic examines the various ways businesses can source capital, categorized by the length of time the money is needed: short-term (under 1 year), medium-term (1-5 years), and long-term (over 5 years). Students learn to match the source of finance to the specific need, such as using a bank overdraft for a temporary cash shortage or a mortgage for a new factory.
Activity 01
Provide groups with five business needs (e.g., a new delivery van, paying a sudden electricity bill). They must choose the best source of finance for each from a provided list and present their 'matches' with a logical justification.
Where can a business source capital to start or expand?
Activity 02
Divide the class to debate whether a new Irish tech startup should lease their office equipment or buy it outright. Students must consider factors like cash flow, maintenance, and ownership.
What is the difference between short-term and long-term finance?
Activity 03
Students compare two different loan offers with different interest rates and terms. They individually calculate the total cost of credit for each, then pair up to discuss which loan is better and why 'cheaper' monthly payments might be more expensive in the long run.
How do interest rates and repayment terms affect borrowing decisions?
A few notes on teaching this unit
Watch Out for These Misconceptions
A bank overdraft is a good way to buy a car.
Overdrafts have very high interest rates and are intended for short-term emergencies, not long-term assets. Using a 'Cost of Interest' comparison chart helps students see how much more they would pay using the wrong source of finance.
Grants are 'free money' with no strings attached.
Most grants come with strict conditions, such as creating a certain number of jobs or staying in a specific location. Reviewing real Enterprise Ireland grant applications helps students understand these obligations.
Methods used in this brief
Income, Expenditure, and Budgeting
Students review personal finance concepts and apply them to business contexts. They learn to prepare and analyze budgets to manage financial resources effectively.
8 methodologies
Cash Flow Forecasting
Students learn to prepare a cash flow forecast to predict future financial health. They analyze the causes of cash flow problems and propose solutions.
8 methodologies