Sources of Finance

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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
    • 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

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