Choosing the right source of finance to pay costs requires consideration of factors that may influence the choice of finance.
Posts tagged as “external sources of finance”
Subsidies are sums of money given by the government to producers of commodities which are widely used by the majority of the society.
Government grants are non-repayable funds, ‘financial gifts’, a complimentary finance that does not need to be repaid in the future.
Business Angels are informal wealthy investors who invest in high-risk and high-return entrepreneurial businesses at a very early stage.
Venture Capital (VC) is capital invested in business start-ups or growing small and medium businesses offering innovative technology.
Bonds, or debentures, are fixed-income financial instruments, essentially long-term loans issued by a business to investors.
A long-term bank loan is provision of finance by the lender to the business for a long period of time. The lender is a commercial bank.
Hire purchase occurs when an asset is sold to the buyer who agrees to pay fixed payments over an agreed period of time. How does hire purchase work?
Debt factoring is the process of a business selling its debt to a debt factoring company. The debt factoring company buys the unpaid invoice for cash.
Businesses use trade credit to delay payments to their suppliers. They negotiate payments to take longer to pay outstanding invoices.
Overdraft is when the bank agrees to let the business spend more money than the business has in its official bank account.
External sources of finance come from outside the business. Support from family and friends belongs to external sources of finance.
There are many sources of finance that businesses can obtain their finance from. These include internal and external sources of finance.
There are many different sources of finance available to businesses. There are also many factors that influence the choice of sources of finance.