AS Economics and Business Sources of finance Unit 1. By Mrs Hilton for revisionstation. Lesson objectives. To be able to discuss all the relevant sources of finance for a business To be able to answer a past paper question on sources of finance. Starter.
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
By Mrs Hilton for revisionstation
Buy Now pay later
Venture capital is also known as private equity finance. Venture capitalists (VCs) will invest large sums of money in a business in return for shares in the company.
Typically, VCs will invest at least £50 000 in a small regional business although this can rise into millions of pounds.
The VC will look for a high rate of return in a specific time period.
They look for a strong business plan, sound management and a proven track record, making it difficult for start-up firms.
A bank will want to see a business plan so they know how their money will be paid back.
A bank will charge interest on the loan
A bank will ask for security or collateral on a loan this may be a house or another asset that can be seized if the loan is not paid back
In the graph in Jan and Feb the business would need to borrow from an overdraft until there was an income in March
The business that sells the asset will no longer have the benefit of that asset and it will not appear on the balance sheet of the company – meaning the business will look less attractive to investors
Internal source of finance