Raising Finance
- Created by: snowrockskjj
- Created on: 11-01-17 17:07
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- Raising Finance
- When raising finance,there are three vital questions to ask
- How Secure is the source?-sale of shares is 100% secure, bank overdrafts can be cancelled so not as secure.
- How expensive is the source?- when starting a business due to high risk = investors wanting high rewards
- Is enough being released?- unknown issues can asrise, always burrow 25% extra than expected as a safey net
- planning finance decisions
- The rule is simple it is: short term needs require short term finance;long term needs require long term finance
- Types of short term finance
- Trade credit
- Getting a longer credit is an effective way to raise short-term finance. For a small business start up this is almost impossible to do at the start
- Conclusion
- When deciding how to raise capital, the starting point is to identify how much you need and how long you need it for.Broadly, there are three options:
- Loan captial
- Share captial
- Internal sources, such as reinvesting the profit the firm is making.
- Most experts would then advise balancing out the capital: in other words, not relying too much on share capital and not too much on loans
- When deciding how to raise capital, the starting point is to identify how much you need and how long you need it for.Broadly, there are three options:
- When raising finance,there are three vital questions to ask
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