sorces of finance

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Economic Systems

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sorces of finance

External

government grants and Princes trust loans and grants

businesses run by the age of 18-30 can apply for low interest loans from the princes trust

Grant were they dont have to pay the loan back

Available from EU, National government and local government.

Family or friends

payable to a bank or other leader

often paid back at a lower rate

family or friend who invests in the businss in exchange for ltd shares or paid back

Share Issues

known as floating on the stock exchange

limited companies can sell shares on the stock exchange

shares are not shared publicly

a good way to raise finance

Factoring

takes a percentage cut for this service

recieves the money immediately

business that sells it debts

Venture Capitalists

usaully used in return for a share of the ownership

people who invest in new and u--and-coming risky ventures

Leasing

leasing often used by companies for vechiles

business doesnt own the goods

Businesses can make use of resources and pay to use them

Hire Purchases

goods are not owned by the business

if payments are not made then finance company can take them back

resources can be used by the business while being paid for to a finance company

Building Societies

The risk of the venture

security will be needed

Interest is payable

Banks

Interest is payable based on prredicted risk

secuirity will be need to be provided

Offer Loans

internal

Capital from profits

some businesses it is not possible to use capital profits

if they are charity or not-for-profit organisation

Owners savings

Own Personal savings

business remains totally in the control of the owner

interest doesnt need to be paid