Sources of Finance (Raising Capital)

Sources of Finance (Raising Capital)

Open Ended

Three internal sources of finance are:

(These are ways in which you can raise capital without borrowing.)

Internal Sources (Own Capital)

Your own savings

Wages or salary

Sell your own assets (your car, your house, your jewellery etc.)

Open Ended

What are the advantages of using your own savings to start a business?

Open Ended

What are the disadvantages of using your own savings to start a business?

Open Ended

What are advantages of of using your own wages to start a business?

Open Ended

What are the disadvantages of of using your own wages to start a business?

Open Ended

What the advantages of selling your assets in order to raise capital?

Open Ended

What the disadvantages of selling your assets in order to raise capital?

Multiple Choice

One of the downsides of issuing shares when raising capital is:

• Cashflow problems

• Loss of control

• You do not have to pay dividends

• You can make your decisions

Multiple Choice

A bank loan will involve all of the following except:

• Paying interest

• Paying dividends (a share of the profit)

• Paying in instalments

• Providing security

Multiple Choice

Leasing can be used to

• Advertise

• Purchase inventory

• To purchase vehicles

• To purchase raw materials

Multiple Choice

A private limited company can raise money on the stock exchange

• True

• False

• None of the above

• All of the above