sources of finance

Question 1

what are external sources of finance

Answer 1

overdraft
leasing
sale and leaseback
debt factoring 
trade credit
loan 
venture capital

Question 2

what are internal sources of finance

Answer 2

retained profit
working capital
sales of assets

Question 3

advantages and disadvantages of overdraft

Answer 3

+ provide working capital

- short term

Question 4

advantages and disadvantages of leasing

Answer 4

+ gain of asset without buying it

- expensive

Question 5

advantages and disadvantages of debt factoring

Answer 5

+ flexible

- don’t get all the money

Question 6

advantages and disadvantages of trade credit

Answer 6

+ interest free

- can gain a bad reputation

Question 7

advantages and disadvantages of venture capital

Answer 7

+ full input into the business

- can take control

Question 8

advantages and disadvantages of retained profit

Answer 8

+ cheapest source of finance

- loss of profit distribution to owners

Question 9

advantages and disadvantages of sale of assets

Answer 9

+ gets rid of unwanted assets

- short term source of finance

Question 10

advantages and disadvantages of working capital

Answer 10

+ internal source

- can be limited in size