Different Sources of Finance for Businesses Essay -- Papers Business F

Different Sources of Finance for Businesses Introduction This assignment will look at the different sources of finance that are available to a small business or a big company. With each source of finance listed the report will assess the implications that can arise and along with this the report will look at the cost to the business to taking a curtain source of finance. All businesses need short-term finance from the very beginning to start up the business and to cover day-to-day running costs. This provides the business with working capital. However businesses also need long-term capital to help them to grow and expand, and this is paid back over a number of years. Without finance a business would find it difficult to accomplish anything, for example someone who decided to start up a shop would need finance at first to just buy the shop and the stock. Even a window cleaner would need finance to buy equipment such as ladders and buckets. But this can be taken onto a larger scale, as all businesses need finance at some point. Different sources of finance The report will now list the different sources of finance available, starting with sources available to small and new businesses to sources only obtainable to big companies. External Sources of Finance This source of finance comes from outside the business and involves the business owing money to an outside individual(s) or companies. Personal Savings This mainly applies to sole traders, partnerships and small private companies. Owners may use some of their own money as capital to invest in the business. Usually this option is used by the person(s) who will... ...business plan * Details of how much finance is needed and how it will be used * The most recent trading figures of the company, a balance sheet, a cash flow forecast and a profit forecast * Details of the management team, with evidence of a wide range of management skills * Details of major shareholders * Details of the company's current banking arrangements and any other sources of finance * Any sales literature or publicity material that the company has issued. A high percentage of requests for venture capital are rejected on an initial screening. Thus only a small percentage of all requests survive both this screening and further investigation and result in actual investments. Recent successes in this area if financing include the internet search engine 'Google'.