2.1.1 internal finance

Owners capital

• when the entrepreneur invests their own personal assets into their business

• Adv: no interest pay, quick& easy, highly flexible

• Disadv: owner loses all if business fails, can get into personal debt

Sale of assets

• Current assets: will change in value in the short run

• Fixed assets: will stay in business for more than a year

• adv: immediate money, no interest pay, owner still has full ownership

• disadv: may take time to sell, business loses future use of assets

Retained profit

• Profit kept with in a business from the year.

• Can either be kept in business or paid out as dividends

• Adv: highly flexible -shareholders in control, owner in control, low cost

• disadv: danger of accumulating profits, opportunity cost for shareholders

Internal finance

Within the business