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n and the encumbrance of that realty through the granting of a mortgage which secures the loan. However, the word mortgage alone, in everyday usage, is most often used to mean mortgage loan.

By looking at the mortgage calculator, we can see that for an average ￡250,000 house, with a deposit of 5%, also an interest rate of 1.97% and is to be repaid over 30 years that give a total repayment of ￡880.06 per month, and the interest is ￡389.90. This is the general idea of a mortgage, it is considered as a long term loan

Short Term

A short term loan is used for emergencies, money that is required in short notice and paid back in a short time. However interest rates are catastrophically high.

We can see that to borrow ￡200, and pay it back in 15 days, the interest is ￡35.90 which is very high. The advantage of a short term loan is that is it very flexible, the person borrowing the money has control when they wish to pay.

Overdraft Facilities

An overdraft occurs when withdrawals from a bank account exceed the available balance. In this situation a person is said to be 'overdrawn'.

If there is a prior agreement with the account provider for an overdraft protection plan, and the amount overdrawn is within this authorised overdraft limit, then interest is normally charged at the agreed rate. If the balance exceeds the agreed terms, then fees may be charged and higher interest rate might apply. [13]

This is similar to a short term loan but, it is not applied for. An advantage of this is that it is great for a short term loan, or that little extra that may be required for buying that television. However if is not paid back soon, then interests rate will rocket. Some major banks or building societies do offer 0% interest on overdrafts but only for a while. In terms of construction an overdraft should be the last resort for funding, and it should not be looked at as a solution.

Grants

Grants are funds disbursed by one party, often a Government Department, Corporation, Foundation or Trust, to a recipient, often (but not always) a non-profit entity, educational institution, business or an individual. In order to receive a grant, some form of 'Grant Writing' often referred to as either a proposal or an application is usually required.

A grant is great for any one and everyone, they are given to people and they do not need to be paid back. In most circumstances they are only small sums of money. In addition to this, these grants are only given for specific purposes or given to those who need it. For construction purposes they are given out but only for specific part of the project for example the windows or exterior finishes, it all depends on the client.

Venture Capital

Venture capital is provided as seed funding to early-stage, high-potential, growth companies and more often after the seed funding round as growth funding round in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company. Venture capital investments are generally made in cash in exchange for shares in the invested company.

Venture capital is attractive for new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank