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Page 1

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What is Sources of
Finance all about?
`Sources of Finance' is all about
where you get your money from as a
business. It really is that simple!


But as with everything in Business Studies you need to
think about some wider issues to get your answer right:




LET'S LOOK AT…

Page 2

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It is just the same for you. If you go into a shop and see
something that you really like and want to buy but can't
afford it then what do you do?




WRITE DOWN BELOW WHAT
YOU WOULD DO:

Page 3

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USE YOUR SAVINGS!
Well you could maybe spend all of the money that you have
saved up to buy the item that you want.

The big advantage of doing this is that you do not have
to borrow any money from your mum and dad and
therefore do not have…

Page 4

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BANK LOAN
If you cannot afford the item you want with just using your
savings (if you have any), then you might go to your bank
manager and ask them if you can borrow some money and
agree to pay them back later on.


There are benefits and problems of…

Page 5

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TRADE CREDIT


Another way of getting that item that you really wanted is
to use something called Trade Credit.



Let's see how this might help us:

Page 6

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Bob the Blob's Question Time

WHAT AM I?

I have two words and start with the letter R.

I am interest free and I do not have to be
paid back!

I might not be available to every business.

I am kept back in a business for future use.


I…

Page 7

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Explain in as much detail as you can which method of finance out
of a bank loan and my own savings (retained profit) I might use to
buy a new car.




Make sure that you have given the advantages and disadvantages of BOTH
a bank loan and using your own…

Page 8

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OK....BUT REMEMBER THAT YOU HAVE TO PAY SHAREHOLDERS'
DIVIDENDS EVERY YEAR.....THIS WILL COST YOU MONEY!
SHAREHOLDERS ALSO WANT TO HAVE SOME SAY IN HOW YOU
RUN YOUR BUSINESS.

WHAT IS AN OVERDRAFT?

Page 9

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Ever wanted more money in your bank account? Well an
overdraft is an agreement between you and your bank that
actually allows you to take out more money than you have
in your current account. GREAT!!!


There is a problem
though......you have to pay back
this money and you are…

Page 10

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Well.....actually there are loads of different types of finance
but we will finish this section by looking at two of the major
ones.


LEASING
If you wanted a new car as a
business but did not have the
money to buy one, you might be
able to lease one.


A…

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