Source of finance


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Published in: Economy & Finance, Business

Source of finance

  1. 1. Source of<br />By the best team<br />Team members:Grace, Dimitry, Celli, Alan, tiffany<br />
  2. 2. Outline<br />Internal sources<br />External sources<br />Longterm sources<br />Shorterm sources<br />
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  4. 4. Internal and External Sources<br />Internal Sources of Finance<br />Come from trading of business<br />Day to day cash from sales to customers<br />Money loaned from trade suppliers through extended credit<br />Reductions in amount of stock held by business<br />Disposal (sale) of any surplus assets no longer needed (e.g. selling a company car)<br />External finance<br />Comes from individuals or organisations who do not trade directly with business<br />E.g. banks, investors. government<br />
  5. 5. Internal sources<br />
  6. 6. External sources<br />
  7. 7. Short and Long-term Finance<br />Short term finance<br />Needed to cover day to day running of business<br />Paid back in a short period of time, so less risky for lenders<br />Long term finance<br />Tends to be spent on large projects which will pay back over a longer period of time<br />More risky so lenders tend to ask for some form of insurance or security if company is unable to repay loan.<br />A mortgage is an example of secured long-term finance<br />
  8. 8. Short term:finance the business for up to 1 year<br />Medium term: finance the business for up to 5 years<br />Long term:finance the business for more than 5 years<br />
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  12. 12. Internal and external finance<br />Finance can be obtained from either internal or external sources<br />Internal means it comes from within the business<br />External means it is obtained from outwith the business<br />
  13. 13. Reference<br /><br />Sources-Of-Finance-Ppt-Om<br />