Kategoriak: All - factoring - shareholders - savings

arabera nurul farah khairul azman 12 years ago

2179

Sources of Finance

Businesses have various options for financing their operations, which can be broadly classified into internal and external sources. Internal sources include the owner's personal savings and reinvested profits, which help maintain full control but may be limited in scale.

Sources of Finance

Sources of Finance

external sources

banks

assets such as a house

interest payable based on the predicted risk
overdraft facilities
builing societies
security

assets

interest is payable based on the risk
overdraft facilities based on the business plan
commercial mortgages
business accounts
offer loans
hire purchase
finance company can take them back if payments are not made
goods are not owned by the business
used by the business while they are being paid for to a finance company
leasing
does not owned the goods at the end of lease
make use of resources and pay to use them every month
venture capitalists
return for a share of the ownership
invest in new and up-and-coming risky ventures
factoring
collects the debts and takes a percentage cut for this service
sells it debts to anothe rcompany and receives some of the money immediately
share issues
known as floating on the stock exchange
not offered publicly but business contacts, friends or family can buy them
raise finance
friends or family
money from friend and family may either invested in the business in exchange
government grants and Prince's Trust loans and grants
Subtopic
amount of the money will depend on where it is coming
money given to an entrepreneur that does no have to be paid back

internal sources

capital from profits
owner's savings
business remains totally in the control of the owner
interest does not to be paid
use their own personal savings to start the business