CHAPTER 9 - Business Finance

Question 1

Internal sources of finance

Answer 1

• Retained profit
• Working capital
• Sale of assets

Question 2

External sources of finance

Answer 2

• Bank loans
• Overdrafts - A loan is borrowing a fixed amount, for a fixed period of time, perhaps 3–5 years. Payments made up of interest and capital are made monthly
• Trade credit - interest-free way to raise finance. Businesses buy items such as fuel and raw material and pay for them at a later date