In our look at cash flow forecasting, we saw that lack of cash
was one of the biggest problems facing a business. Without cash,
the business would not be able to survive. With many possible uses
of finance - wages, advertising, expansion, paying the interest
on loans, etc - we should consider the various sources of
finance available to businesses. Each source has its own advantages
and its own disadvantages and different sources will be more appropriate
in different circumstances.
You will need to be able to evaluate different
methods of raising long and short term finance from a variety of
sources.
Internal Sources
Retained profit, sale of assets, reducing stocks, trade credit
External Sources
Personal savings, commercial banks, building societies,
factoring services, share issue, debentures
