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SOURCES OF FINANCE (INTERNAL SOURCES (SALE OF ASSETS, PROFITS RETAINED IN…
SOURCES OF FINANCE
INTERNAL SOURCES
SALE OF ASSETS
PROFITS RETAINED IN THE BUSINESS
PERSONAL FUNDS FOR SOLE TRADER
MANAGING WORKING CAPITAL MORE EFFICIENTLY
EXTERNAL SOURCES
MEDIUM TERM FINANCE
MEDIUM TERM BANK LOAN
HIRE PURCHASE AND LEASING
LONG TERM FINANCE
DEBENTURES
BONDS ISSUED BY COMPANIES TO RAISE DEBT FINANCE
LONG TERM LOANS FROM BANK
LOANS THAT DO NOT NEED TO BE REPAID AT LEAST ONE YEAR
SALES OF EQUITY
SHARES-FINANCE
PERMANENT FINANCE RAISED BY COMPANIES THROUGH SALES OF SHARES
SOURCES OF LONG TERM FINANCE
GRANTS
VENTURE CAPITAL
RISK CAPITAL INVESTED IN BUSINESS START-UP
SUBSIDIES
FINANCIAL BENEFITS GIVEN BY THE GOVERNMENT TO A BUSINESS TO REDUCE COSTS AND ENCOURAGE INCREASED PRODUCTION
BUSINESS ANGELS
ADVANTAGES
CAN EASILY MAKE INVESTMENT DESICION
HELPS BUSINESS WHEN TAKING CRITICAL DESICION
BETTER LOCAL KNOWLEDGE
DISADVANTAGES
THEY WANT TO SHARE OWNERSHIP AND REQUIRE CERTAIN PART OF PROFITS
BUSINESS OWNERS STILL NEEDS TO GET INVESTORS TRUST
SHORT TERM FINANCE
DEBT FACTORING
TRADE CREDIT
BANK OVERDRAFT