Business

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Business

Advantages

  • no interest and does not have to be paid
  • no loss of control of the business
  • share capital does not have to be repaid
  • overdraft is very fexible- can be varied on a daily basis up to an agreed limit

Disadvantages

  • when profits are low business growth will be slow so loans or share issues might be better option
  • the assets is no longer owned
  • may be loss of control by original owners
  • interest costs may be high

Evaluation

which source of finance is best? explain when each source of finance is most likely to b used( include pros and cons)

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