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SOURCES OF FINANCE (reasons to have sources of finance (to expand business…
SOURCES OF FINANCE
reasons to have sources of finance
to expand business
setting up more branches
increase number of franchises
become multinational
to merge or takeover
to purchase new technologies
payoff debts
suppliers
outstanding bank loans
everyday running of the business
payoff electricity, gas, bills...
wages
raw material
short-term sources of finance
payoff bills
everyday running the business
internal
money coming from the inside of the business
retained profit
money left from previous years
ST LT
lease of assets
when renting anything with monetary value which le business owns
ST
sale of assets
when selling unused assets which have a monetary value.
ST
external
Money coming from the inside of the business
princes trust
Only in england. where the prince gives oney to people who need it
ST
crowdfunding
a platform in which anyone can give money to the business does over the internet
LT
modern business, attractive,new projects
bank loan
amount of money borrowed for a fixed period of time and it has to be paid back with interests.
LT
all business
venture capitalist
where people give money to new business that need money in change of owning some shares .
LT
not plcs. new businesses , small businesses
trade credit
a delayed payments normally from 30-90 days. up to six months in which you receive product but you pay it later.
ST
trust-worthy business (sometimes ltds or plcs)
credit cards
when small businesses need to pay small debts or supplies .
ST
all.
bank overdraft
agreement with the bank in wich you can pass your limit
ST
all
relatives and friends
ST
small businesses (sole traders.partnerships,new businesses)
sale of shares
when selling shares to get more finaance . can be a disadvantage as they can buy majority of the shares and take power of it
LT
PLC's or LTD's
long term sources of finance
expand the business
