sources of finance Flashcards
1
Q
What are some internal sources of finance?
A
- owner’s capital
- retained profit
- sale of assets
2
Q
Why is owner’s capital a good choice?
A
No cost to the business, no interest charges applied
3
Q
What is bad about using owner’s capital?
A
- It’s limited, may still not be enough
* once it’s gone, it’s gone
4
Q
Why is retained profit a good choice?
A
- no interest charges
* no payment of dividends
5
Q
What is bad about using retained profit?
A
- can be limited
- can take a long time
- can’t be used by start ups
6
Q
What is good about sale of assets?
A
- raise money quickly
* good if assets are no longer in use
7
Q
What is bad about sale of assets?
A
•loss of asset
8
Q
What are some external sources of finance?
A
- f+f
- bank loan
- venture capitalists
- overdrafts
- business angels
- leasing
- gov grants
