sources of finacne

Question 1

what is internal sources of finance

Answer 1

finance that is provided inside the business or owners

Question 2

what is external sources

Answer 2

finance that is provided for outside sources

Question 3

examples of internal sources of finance

Answer 3

retained profit
owners savings
saving of assets
improved management

Question 4

examples of external sources of finance

Answer 4

loans 
overdraft 
share capital
business angels 
venture capital 
crowd funding 
peer to peer funding 
leasing 
trade credit 
grants

Question 5

what are the advantages of internal sources

Answer 5

not accountable to any outside entity - dont need to explain business decisions to anyone
flexibility - easy to adjust payment due to current cash flow
dont have to worry about paying back loan

Question 6

what are the advantages of external sources

Answer 6

immediate money
venture and angel capital can offer advice and support for your business to help guide the business
can use internal sources eg retained profit for other reasons
allows for business growth