Sources Of Finance A Business Needs Finance - 1438 Words

SOURCES OF FINANCE A business needs finance because it can help with starting up the business, running the business and expanding the business. New businesses can find it difficult to raise finance because they usually have just a few customers and many competitors. To start up the business, you will need to pay for premises, new equipment and advertising. For running the business, you will need enough cash to pay staff wages and to pay suppliers on time. When expanding the business, you will need enough funds to have a new branch in another part of the nation. There are different sources of finance, one being Short Term and the other being Long Term. Finances which are short term must be paid back within a year whereas sources of finance which is long term can be paid back over many years. Some sources of finance which we are going to look at is, an Overdraft Facility, Factoring and Hire Purchase. Overdraft Facility An overdraft facility is where a bank will allow a business to take out more money than the business actually has in the bank. An overdraft can be flexible and you can borrow what you need at the time. It is quick to arrange and the banks do not usually charge you for paying off the overdraft earlier. However, Overdrafts do have some disadvantages. Your bank can charge you if you exceed your overdraft limit without authorization. The bank can have the right to ask for the repayment of your overdraft amount at any time. This can be unlikely to happen unless youShow MoreRelatedManaging Financial Resources Essay examples1182 Words   |  5 PagesCourse:HND BUSINESS Subject: managing financial resources and decisions. Student Name: Irshad ul haq Student No:1124 Assessor Name: mr olumide ologan Content Page Section No Page No 1. Introduction 2. Identify the sources of finance available to a business.(P1.1) 3. Assess the implications of different sources.(P1.2) 4. 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When starting up your new business premises will need to be secured from which you will trade. Im going to look at ways that you could secure premises. The first option available to you is a mortgage; theseRead More1.1 Analyze The Different Costs In A Given Business. .Rent1503 Words   |  7 Pages1.1 Analyze the different costs in a given business Rent  £10,000 pcm Salaries  £22,000 pcm Insurance  £1,000 pcm Electricity  £1,500 pcm Cleaning  £500 pcm Bank Loan repayments Read MoreDescribe Sources of Internal and External Finance for a Selected Business, Unit 2 P41424 Words   |  6 PagesDescribe sources of internal and external finance for a selected business For a business to run successfully on a daily basis it needs finances. Success comes when a business expands, reinvests and uses human recourses to run. Bentalls need money to run their business effectively and successfully. It needs finance for its daily running of the business for example, paying staff wages, paying bills for electricity and rent, paying taxes on time and ordering stock regularly. For a long term goal, BentallsRead MoreTypes Of Training Methods That Can Be Used By Different Organizations1504 Words   |  7 Pagesto take two days, the first day we shall look at the various sources of business finances and their implications on the business. The following day we shall look at the tax effects on the various sources of funds to the business. There are different types of training methods that can be used by different organizations. For our case we are going to learn about how business entities can be able to source their finances, manage their finances so that they can meet their financial obligation. Secondly