internal sources of finance

Question 1

internal sources

Answer 1

sources of money from within the business from owner or previous business income.

Question 2

Owners Funds

Answer 2

money into business from priv savings of the owner.

Question 3

advantages of owners funds

Answer 3

dont pay interest or repay finance

retention of ownership by the individual.

Question 4

Disadvantages of owners funds

Answer 4

amount available may be limited

put stress on the day to day finance of the individual.

Question 5

retained profits

Answer 5

when businesses make profits

owner decides to spend on themselves or use some profits to expand.

Question 6

advantages of retained profits

Answer 6

no need to repay
instantly available
no incur additional cost such as interest payments
control is not lost

Question 7

disadvantages of retained profits

Answer 7

may be limited funds available
want to see short term return on their investment
not an option for a start up business

Question 8

sale of an asset

Answer 8

businesses will have possessions that they no longer need.these can be sold off to raise money for other investments.