Finance Method

Question 1

Retained profit

Answer 1

Internal,from past profit,may need it for future,but cheapest way to get finance.

Question 2

Working capital

Answer 2

Internal,available profit from business,available on day to day basis,can get immediately

Question 3

Selling assets

Answer 3

Internal,assests that are no longer ended ,only applies to established business’s,usually unwanted anyway.

Question 4

Bank loans

Answer 4

External,fixed amount/time given 3-5years,risk to personal assets,offer security against loans easy.

Question 5

Overdraft

Answer 5

Internal,withdraw from account than own,bad rep,get more than own.

Question 6

Trade credit

Answer 6

External,buy items obtain at later date,bad rep,xan get discount easy

Question 7

Debt factoring

Answer 7

External,set receivable,discounts decrease revenue,can obtain immediately