Source of Finance

Front

Business can raise finance with?

Back

2 ways:

1) Internal sources - raising finance from the business own assets or from past profits remaining

2) External sources - raising finance from outside the business (Eg. Banks)

Front

Internal source of finance

Back

4 types:

1) Retained Profit (Retained Earnings)

2) Sale of unwanted assets

3) Reductions in working capital

4) Sale & leaseback of NCA

Front

External sources of finance

Back

2 types:

1) Long Term (8 types)

- Hire purchase

- Leasing

- Share capital

- Debentures

- Bank long-term loans

- Mortgage

- Government grant

- Venture capital

2) Short Term (3 types)

- Bank overdraft

- Trade credit

- Debt factoring