Internal and external sources of finance

What does internal mean?

• A source from within the business
• A source from outside the business

What does external mean?

• A source from within the business
• A source from outside the business

Which is an example of an internal source of finance?

• Owners' Funds
• Hire Purchase
• Leasing
• Trade credit

Which is an example of an internal source of finance?

• Owners' Funds
• Hire Purchase
• Leasing
• Trade credit

Which is an example of an external source of finance?

• Owners' Funds
• Sale of assets
• Retained profits
• Bank loan

What is an advantage of owners' funds?

• There will be little or no interest
• You can pay in smaller installments
• They take a long time to arrange
• You don't have to pay it back

What is the most likely source of finance for a small firm?

• A debenture

• Issuing shares

• A bank loan

Which is an example of an external source of finance?

• Owners' Funds
• Hire Purchase
• Retained profits
• Sale of assets

Which is an example of an external source of finance?

• Owners' Funds

• Sale of assets

• Retained profits

• Bank loan

What type of finance involves less profit going to the owners?

• Retained profit

• Sale of assets

• Overdraft

• Bank loan