Sources of Finance
- Created by: evemorrison
- Created on: 16-11-18 08:06
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- Sources of finance
- Internal
- Sale and leaseback
- Selling an asset and leasing it back
- Owner capital
- More risk for owner
- Retained profit
- Not suitable for new businesses
- Profit after tax
- Sale of assets
- Equipment or property that is no longer useful
- Not impacted by interest
- Available immediately
- No credit checks
- Less finance available
- Opportunity cost
- Sale and leaseback
- External
- Grants
- Crowdfunding
- Small amounts contributed by many people
- Bank loan
- Paid back in regular amounts
- Can be difficult to get esp. new businesses
- Bank overdraft
- Can be asked back at any time
- Venture capital
- Don't play an active role in the business
- Provide finance in exchange for % ownership
- Usually provide more than bank
- Share capital
- Most relevant for Public Limited Companies; on stock market
- Business angels
- Play an active role in the running
- Leasing
- Trade credit
- Opportunity cost
- Internal
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