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Sources of finance : - Coggle Diagram
Sources of finance :
Internal
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Retained profits: are the earnings that are kept in the company instead of being paid out as dividends.
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External
Medium term
Leasing: A lease is a contract between two entities, the lessor and the lessee, in which the lessor grants temporary possession of something, such as property, land, or equipment, to the lessee for a specified period and for a specified rent.
Business angels: These are extremely wealthy individuals who choose to invest their own money in businesses that offer high growth potential
Subsidies: It has a purpose to reduce costs but the focus of subsidies is to provide extended benefits to society
Long term
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Grants: Non-repayable funds provided by governments or institutions to businesses or other entities for specific purposes.
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Venture Capital: It is a form of high-risk capital ,usually in the form of loans or shares, invested by venture capital firms, usually at the start of a business idea. Venture capitalists seek to invest in small to medium-sized businesses that have high growth potential
Short term
overdraft: overdrafts are a financial service that allows a business to temporarily overdraw on its bank account, i.e. to take out more money than it has in the account.
Debt factoring: This financial service involves an external party taking over the collection of money owed by debtors.
Crowdfunding: A way of raising money from a large number of individuals but small amounts of money per person in order to fund a project/venture.
Trade credit: This source of finance allows a business to postpone payments or to 'buy now and pay later'. Although a sale is made at the time of purchase, the seller or credit provider does not receive any cash from the buyer until a later date. Organizations that offer trade credit usually allow between 30-60 days for their customers to pay.