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Page 1: Retained Profit
Page 2: Sale and Leaseback of Assets
Page 3: Sale of Assets
Page 4: Share Capital (Long Term)
Page 5: Debentures (Long Term)
Page 6: Bank Loan (Long Term)
Page 7: Venture Capital (Long Term)
Page 8: Grants (Long Term)
Page 9: Bank Overdraft (Short Term)
Page 10: Trade Credit (Short Term)
Page 11: Debt Factoring (Short Term)
Page 12: Hire Purchase (Short Term)
Page 13: Leasing (Short Term)…read more

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Retained Profit
The part of a firm's profit that is reinvested in the business rather than distributed to shareholders.
-It is a cheap source of finance (however they are not free) - effectively the "cost of capital" of retained profits is the opportunity cost for
shareholders of leaving profits in the business (i.e.…read more

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You get the cash immediately, meaning that it is good if a firm is short of cash, this is good because it gives the firm cash, which is the most liquid
asset, so that they can pay off debts.
- Once the asset is sold, if it breaks the company is no longer responsible, and so do not have the responsibility to repair the asset, this is the
responsibility of the owner.…read more

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- Limited Liability encourages shareholders to invest in the business, as it restricts the amount of money they can lose.
-It is not necessary to pay shareholders a dividend if the business cannot afford these payments. This contrasts sharply with loans- interest must be paid on
these, regardless of the success or failure of the business.
-Bringing new shareholders into a small business can add further expertise.…read more

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Bank Loan
A sum of money provided to a firm by a bank for a specific agreed purpose.
Banks take security, usually in the form of property so that they can eliminate the risk of a loan not being repaid. If the loan is not repaid, they can sell the
property and collect the sum that is owed to them.
- The interest rate and therefore the repayments are fixed in advance, making it easy to budget the schedule for repayments.…read more

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The size of the loan and the period of repayment can be organised to match the exact needs of the firm.
-The size of the loan may be limited by the amount of collateral that can be provided rather than by the amount of money needed by the business.
There is less flexibility in a bank loan, so the business will tend to pay interest for the agreed period, even if it gets into a position where it can pay off the
loan early.…read more

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There are many different grants available to businesses. These are sponsored by the Government, the EU and other agencies such as The Prince's Trust.
Growth Resourcing Associates offer an Internet advisory service for obtaining grants. They estimate that there are over 1,000 different grants available.
Research shows however, that fewer than 3% of all new firms are financed by grants.…read more

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When a bank allows an individual or organisation to overspend its current account in the bank up to an agreed (overdraft) limit and for a stated period of
-They are extremely flexible and can be used on a short-term basis (even just for a single day) if the business has a temporary cash-flow problem.
-Interest is only paid on the amount of the overdraft being used rather than the maximum level allowed.…read more

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Eases the cash flow as you can pay after 28-30 days, this means that if you cannot pay immediately, you have time to raise the cash needed.
-If you do not pay them back on time you can build up a bad credit history.
-Only companies with good credit history can be accepted the trade credit grant.
Debt Factoring
When a factoring company (usually a bank) buys the right to collect the money from the credit sales of an organisation.…read more


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