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Finance again - Coggle Diagram

- - - - Profit that the owner doesn't keep but re-invests into the company
    - - When a business sells its assets that it no longer needs, this could be a source of finance as the business will acquire money for the sale of their assets
    - - When the owner uses their own personal money to staart thye business
    - - You don't lose control of your company
      - no aprovals needed
      - lower cost (no interest)
      - no legal obligation
      - reduced risk
      - easy for smaller business to access
    - - More limited options to spend money compared to external sources as you have less money
      - Oportunity of cost involved
        
        Opportunity cost represents the potential benefits that a business, an investor, or an individual consumer misses out on when choosing one alternative over another.
      - Money in the business might not be sufficient
  - - - Share capital
        
        Limited companies issues shares to raise capital. It is not a fixed loan from an institution but rather the company will pay dividends as an incentative
      - Venture capital
        
        Specialised investors who provide money to companies . These investors have a stake in the business and re entiteled to a certain percentage of profit
      - Loan capital
        
        Fixed agreement between business and banks, where a certain amount of money is given to a business which needs to be returned + interests . interest must be paid back at a regular intervals
      - Crowdfunding
        
        the practice of funding a project or venture by raising money from a large number of people who each contribute a relatively small amount, typically via the internet.
    - - a revolving line of credit attached to your business transaction account which allows you to draw on funds, when you need, up to an approved limit
      - short term
    - - Gives you the ability to pay off unexpected expenses the business has no capital for
      - For bigger companies, it is easy to access an external source of finance
      - Possibility to expand business quicker
      - flexibility in business strategy
    - - debt obligations are given to the business
      - Can lose control over the business if you sell shares of your business
      - Higher cost because of interest
      - A smaller business will have a limited number of external sources of finance