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Why is Finance Needed?
All organisations need finance:
To start in business ­ to do this, they need assets
which they must buy
To survive ­ the cash inflows must balance their cash
outflows. If this doesn't happen over a period of time
the business will not be able to pay its way
To grow ­ a business needs to grow extra finance to
buy more assets and to meet expenses so that it can
expand…read more

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The Main Sources of Finance
The sources of finance vary according to whether
the business is in the private or the public
sector. Private sector businesses have a
range of sources which they can use.
Internal Sources
External Sources…read more

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Internal Sources
The main source of day-to-day cash comes from the business'
Sole traders, partners and directors of Ltds. may decide to keep
proficts in the business, using the cash from these profits to invest
in business development
The owners can use trade credit, delaying paying their bills to
save cash
The can reduce stock levels to free the cash `tied up' in these
Businesses can sell any surplus assets they no longer need…read more

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External Sources
The savings of the owner, and/or borrowing from family and
friends are possible sources for sole traders and partners
Ltds. can issue shares
Banks arrange short-term borrowing such as overdrafts
Loans are also available from banks and often have fixed
repayment amounts
The business can sell its debts by `factoring' them to a specialist
Government grants may be available e.g. when setting up a
business in certain regions
Hire purchase and leasing are possible sources of extra finance…read more

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Public Sector Sources
Public sector businesses obtain their finance either
directly or indirectly from the public
Public corporations get their finance through the
government grants from tax collected, and by
borrowing from the Treasury
Local authority undertakings are also funded through
government grants, through collecting taxes and rates
from local people and businesses, and by running
revenue-making businesses such as local leisure
centres…read more

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Detailed presentation that goes through the sources of finance for large and small businesses. The information can be adapted to meet student's needs eg make flash cards, mind map etc


theres nothing here 

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