Sources of Finance

What is a source of finance?

• A method of earning incomes

• The different ways a business can fund themselves

What does internal mean?

• A source from within the business
• A source from outside the business

What does external mean?

• A source from within the business
• A source from outside the business

Which is an example of an internal source of finance?

• Bank loan
• Friends & Family loan
• Retained profits
• Trade credit

Which is an example of an internal source of finance?

• Owners' Funds
• Hire Purchase
• Leasing
• Trade credit

Which is an example of an external source of finance?

• Owners' Funds

• Share capital

• Retained profits

• Sale of assets

Which is an example of an external source of finance?

• Owners' Funds
• Sale of assets
• Retained profits
• Bank loan

What is an advantage of a bank loan?

• There will be little or no interest
• You can pay in smaller installments
• They are quick and easy to arrange
• You don't have to pay it back

What is an advantage of owners' funds?

• There will be little or no interest
• You can pay in smaller installments
• They take a long time to arrange
• You don't have to pay it back

What is an advantage of friends & family loan?

• There will be little or no interest
• You can pay in smaller installments
• They take a long time to arrange
• You don't have to pay it back