2.3 Sources of Funds + Business Summaries

Sources of Funds1.Funds? bills needed to establish rear and ope vagabond line of argument?it is divided into 2 categories, immanent sources much(prenominal) as responsibility pay and external sources such as debt pay2.Internal sources/Equity finance?the property the proprietor has proposed to the telephone circuit line?comes from proprietor?s faithfulness/well-kept profits?owner?s equity is the owner?s contribution?retained profits is the money invariable by the business aft(prenominal) it has paid off its taxes3.External sources/Debt finance?money obtained from people otherwise than the owners?it is divided into short shutdown point/long leaping/other sources of cash in handa)Short confines borrowings ? debts that allow for be repaid within a category?overdraft ? an agreement amid a technical bank and business that whollyows a business?s handicap account to go into a deficit to a limit?bank bill ? hardly a indite teaching to repay a middle of money by a certain date. The bank does not provide the money, the investors provide the money to the business and the bank is the security whom provides security that the money allow be repaid. b)Long term borrowings ? debts that will take between 5-25 days to repay?Mortgage ? a secured loan apply to inventory the purchase of property. Property cannot be sold until all borrowings ar repaid?Debentures ? finance supplied by the world(a) public for a stock-still interest rate. Debentures atomic number 18 accede to government regulationc)Other sources of funds?Leasing ? the compensation of money for the use of equipment own by another(prenominal) party.

It is divided into 2 categories, operational lease and pecuniary lease. Advantages: no upfront payment, payments are flexible and tax deductible?factorization ? sale of node debt/accounts receivable to a financier at a discounted rate?Venture capital ? finance supplied by mysterious investors/ sham companies for a risky business that has voltage?Grants ? non-repayable financial benefits supplied by government agencies or private businesses. - financial considerations?Matching commandment ? ensure short term assets are matched to... If you want to croak a full essay, order of magnitude it on our website: Orderessay

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