Essay sources finance

The sources of finance for start-ups and SMEs can be divided into two: internal which includes (personal savings, family and friends) and external includes (trade credit, venture capitals, business angle, hiring and leasing, bank loans, Factoring and invoice discounting, grant, bank overdraft).

Different decision makers will want different information about the company regarding their interests in the business. A long-term lender will always want to know the gearing ratio of a company while the short-term lender will want to know about the liquidity ratio of the business.

For a sole trader, there is no distinction between the assets of the business and the personal assets of the owner because of unlimited liability. Therefore, owners might offer their own houses as security. Bank loans secured on property are called mortgages. Mortgages are the main source of expansion for small businesses, as they

Discuss about different Sources of Business Finance. Different Sources of Business Finance Business is concerned with the production and distribution of goods and services for the satisfaction of needs of society. For carrying out various activities, business requires money. Finance, therefore, is called the life blood of any business.