Understanding the sources of finance available to a business
You will need to:
- identify the sources of finance available to a business
Focusing on "sources" you need to discuss internal sources, such as from revenue/sales income or selling off assets, and external sources such as loans from banks, development grants (eg from the EU), selling shares in the company, and in the case of a public sector organisation, allocated budget from government and the collection of local taxes.
- assess the implications of the different sources
There will be negative or positive implications for each of the above - for example if assets are sold the overall value of the organisation is diminished, and if loans are arranged then repayments must be made, and with certain sources of funds the "lender" will demand some influence over the organisation's decisions.
- evaluate appropriate sources of finance for a business project
Select a project that is typical for your own organisation, or sector, or select a project which interests you. Then identify, and discuss the merits of, sources of funds appropriate for that project.