Why does a business need finance?
- To start up a business - pay for premises, equipment, advertising
- Run the business - enough money to pay staff wages
- Expand the business - funds to pay for a new branch in a different country or city
Starting up a new business is often very difficult because it is difficult to raise the finance as they have very few customers and lots of competitors.
Ways to finance a business
- Internal sources - funds found inside the business, e.g. profits can be kept for finance expansion, or…