Sources of finance
There are many factors that will influence the types of finance a business decides to use:
- the purpose of the finance
- objectives of the organisation
- amount of finance required
- the type of business (not all sources of finance are available to all businesses)
- length of time the finance is required for
The main sources of finance are:
- bank overdraft
- bank loan
- grant
- mortgage
- share issue
- owner investment
- loan from family or friends
- hire purchase
- crowd funding
- leasing
- retained profit
- venture capital
There are justifications for using each source of finance and it is important that a business chooses the appropriate source of finance for their needs.