Essay on Sources of Finance - 4493 Words

Table of Content Page I. Assignment coversheet†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.1-3 II. Executive summary†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦5 III. Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦.†¦Ã¢â‚¬ ¦...5 IV. Main body†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦..6 4.1. Sources of finance and its advantages disadvantages†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦6-8 4.2. The implications of the different sources of finance†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦8-9 3. Appropriate sources of finance for a business project†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.9-13 4.4. The costs of sources of finance for Vale Filters Limited†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦.13-16 4.5. Importance of financial planning†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.17-18 V.†¦show more content†¦And then Vale Filter can lend money from banks. The main advantage of borrowing from banks is that you might get money to start up your business easily, quickly. The main disadvantage is in the condition that Vale Filter can not pay back the loan, then the bank will take assets from Vale Filter. Moreover Vale Filter has to pay the interest and it is usually not small. The secondary approach to consider that is Government grants. Government is keen that businesses should start up and prosper because successful businesses provide employment and create wealth for the country. Government would like to develop national economy especially in high technology industries and in high unemployment areas. Specifically, government will support biological and chemical technology at Vale Filter. We should know two packages of measures offered by the UK government is â€Å"The Enterprise Initiative† and† Grant for Research and Development† which help small-medium enterprises to use and develop technologically innovative products and processes (BPP, p.21, 2004). The third approach to consider that is Venture Capital. Venture capital is a type of private equity capital typically provided to early-stage, high-potential, and growth companies in the interest of generating a return through an eventual realization event such as an Initial Public Offering (IPO), or trade sale of the company (en.wikipedia, accessedShow MoreRelatedsources of finance1286 Words   |  6 Pagesï » ¿Sources of finance Some sources of finance are short term and must be paid back within a year. Other sources of finance are long term and can be paid back over many years. Internal sources of finance are funds found inside the business. For example, profits can be kept back to finance expansion. Alternatively the business can sell assets that are no longer really needed to free up cash. External sources of finance are found outside the business. For example from creditors or banks. InternalRead MoreSources of Finance1496 Words   |  6 PagesP3 Introduction For this task I will be considering the sources of finance I will need for my company. Why might a business require finance? A business may require finance because they can either: †¢ Be setting up a new business and they do not have enough money to start up. †¢ They may need new equipment to help make the business expand and make more profit. †¢ Or they may even want to replace old machinery. †¢ They may want to move there store to a better location that might benefit thereRead MoreSources of Finance1111 Words   |  5 PagesIntroduction In this essay we will be looking at different sources of finance available for different type of business. Also will be looking at the definitions of different type of sources of finance, the advantages, disadvantages and also giving reasons to why different sources of finance was chosen for the given case studies. Types of sources of finance Bank Loan – is a long term loan and will often be for large amount of money for starting up a business or to expanding. Business will agreeRead MoreSources of Finance972 Words   |  4 PagesSources of finance What are the main sources and finance for UK firms and why? All firms need some kind of financing. Access to finance may differ considerably from firm to firm depending on what type of business they are and how big/known they are; Sole Trader, Public Limited or Private Limited Company. There are both INTERNAL and EXTERNAL sources of finance. Finance can be short, medium or long term. Internal sources of Finance: 2 main types 1) Funds from the owner(s) and the familyRead MoreSources of Finance1627 Words   |  7 PagesUnit 2: Business Resources Assignment 4:P4 Sources of Finance Internal Sources of finance Owners’ savings- the owner of a business often has to use their own personal savings to start a business, particularly if they are a sole trader. This is because banks may not be willing to take a risk and invest in them. Savings are a good source of finance for a business, as interest does not need to be paid to someone else while the money is being used, and the business remains totally in theRead Moresources of finance2021 Words   |  9 Pagesï » ¿Question:   IDENTIFY THE SOURCES OF FINANCE AVAILABLE TO A BUSINESS Answer: There are a number of ways of raising finance for a business. The type of finance chosen depends on the nature of the business. Large organisations are able to use a wider variety of finance sources than are smaller ones. Finance is not just needed when starting a new business, but you may be required to seek further finance even if you’re business is well established i-e further expansion, RD, new product launchRead MoreSource of Finance3105 Words   |  13 Pages1. Identify and describe the various sources of finance 1.1 Internal source 1.2 External sources 2. Assess the implication of the difference sources of finance related to risk, legal, financial and dilution of control and bankruptcy 2.1 Issue debt 2.2 Issue equity 3. Select appropriate sources of finance and make recommendations on the best ways of raising finance TASK 2: Part 1: Assess and compare various costs involve with each source of finance to Vale filters Limited Part 2: PrepareRead MoreSources of Finance1934 Words   |  8 PagesSources of Finance The financing of every business is the most fundamental aspect of its management. Get the financing right and the company will have a healthy business, positive cash flows and ultimately a profitable enterprise. The financing can happen at any stage of a business s development. On commencement of your enterprise the business entity will need finance to start up and, later on, finance to expand. Finance sources may be internal or external but they may also be short, medium orRead MoreSources of Finance7811 Words   |  32 PagesIntroduction - Sources of Finance Introduction to the Sources of Finance resource. Sources of Finance Introduction This resource is designed for use with Accounting courses at A level. This resource is relevant to the following: * AQA Module 5, Section 14.5: Types of Business Organisation, Sources of Finance * OCR Module 2505, Sections 5.3.2 and 5.6.2 For many businesses, the issue about where to get funds from for starting up, development and expansion can be crucial for the successRead MoreSources of Finance4664 Words   |  19 PagesSection 1 – Sources of Finance There are 4 main types of business ownership: †¢ Sole trader †¢ Partnership †¢ Private limited company (Ltd) †¢ Public limited company (Plc) Each of these types of business needs to raise finance for capital investment Sole Trader This is a business that is owned by one person. Sole Traders are responsible for raising all the finance to set up and run the business. Usually a sole trader would be for a small business/ (businesses with a flat