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Internal and external sources of capital, Mía Mongilardi 10°C. - Coggle…
Internal and external sources of capital
Internal
Owner’s funds
Owner’s own money
Working capital
Fund day-to-day operations
Sales of assets
Money from the selling of building, vehicles or parts of the business
Retained profit
The profit made
External
Short term
Debt factoring
Sell a debt to a debt factoring company
Trade credit
Business-to-business transactions
Overdrafts
Short-term bank loan
Long term
Sale and leaseback
Resolve short-term cash flow crisis
Bank loans
Are paid each month over a number of years
Grants
Governments offer grants to businesses
Debentures
Long-term loan to limited companies
Venture capital
Specialist finance providers
Hire purchase
Hiring instead of purchasing an asset, but the business can
own the asset once all the monthly payments are made
Leasing
Hiring instead of purchasing an asset
Mía Mongilardi 10°C.