Sources of Finance

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Sources of Finance

External

Government grants and prince's trust loans and grants

Business run by people between the age 18 and 30 can apply for a government grant, these include students, charities.

A grant is money given to an entrepreneur that is not needed to be paid back

Friends or family

Invested in the business in exchange for share or paid back as a loan

Lower interest rate than a bank or an other lender

Share-issues

Good way for many companies to raise fianance

Able to sell shares on the stock exchange

Factoring

Sell its debts to another company and receives some of the money immediately

Takes a percentages cut for the service

Venture capitalists

People who invest new and up coming risky ventures in return for a share of the ownership

Leasing

Business does not own the goods and it's often used by companies for vehicle

A business can use of resources and pay to use them every month

Hire purchase

The goods are not owned by the business

Hire purchase means that resources can be used by the business while they're being paid for

Building societies

Some scurity will be needed to be provided for example, assets

Offer loans, business accounts commercial mortages and overdraft facilities

Banks

Subtopic

In order to get a loan from the bank you will need to provide some security for instance, assets such as a house

Internal

Owners savings

Interest does not need to be paid to someone else

Is in the control of the owner

Capital from profits

Once the business if operating it is able to invest the money that it makes as profits back in the business