💰Forms of Finance

Long Term

Short Term

External

External

Internal

Internal

Retained Profit 🍾

Can be used how ever you want and is ‘cheap’ due to no interest/ can't be returned

Selling Assets 🖊

Assets can be sold for a higher value than estimated/ loss of equipment, property ect..

Overdraft 🗑

Anyone can get one and are flexible/ bank can call money back at anytime

Hire Purchase ✋

Equipment bought via a small upfront payment and monthly instalments after that, therefore not requiring all the money at once/ can be more expensive than a direct bank loan, and the goods could be repossessed if they buyer falls behind in payments

Credit Cards 💸

Flexible and no interest charges within credit period/Risky and very high interest if period breached

Leasing 🤝

Allows businesses to use expensive equipment without the financial loss, which includes the maintenance and the cost of updating the model. It is also easy to obtain/ more costly if used long term

Trade Credit 🚚

Can pay for resources at a later date/ costs of goods may be higher than buying them outright

Share Capital 🍻

Loans ✏

Owners Capital ❤

Can receive amount immediately to use how ever you want and anyone can get one/ must pay interest back over time

Way of raising large amounts of capital/Give up ownership of company

Can receive amount immediately to use how ever you want and anyone can get one/ must pay interest back over time

Mortgages 🏠

Debentures 🔒

Venture Capitalists 👥

Government Finance and Grants ⛔

Awarded to businesses in specific regions of high unemployment mainly. No to little interest on loans/ Need to be failing or in undesirable circumstances in which risk is high

Can borrow as much money as they are willing to invest/ loss of control and foregoing future profits

Low rate of interest /inflexible

Holders have fixed rate of return and get paid on set date/ no voting rights and only used by plc's