Learning objectives
Explain how the legal form of a business, from sole trader to public limited company, affects the sources of finance open to it.
Describe internal sources of finance: the owner's own investment, retained earnings, sale of unwanted assets, sale and leaseback, and releasing cash from working capital.
Describe external sources of finance: share capital, debentures, new partners, venture capital, bank loans, overdrafts, mortgages, leasing, hire purchase, debt factoring, trade credit, micro-finance, crowdfunding and government grants.
Analyse how the cost, flexibility, effect on control, intended use and the firm's existing debt shape the choice of finance.
Recommend, with justification, the most appropriate source of finance for a business in a given situation.
Continue with a revision plan
These learning objectives are available to everyone. Sign in with an eligible plan to read the full note and worked examples.