Sources of Finance

Personal Funds (Sole traders)

Any financial resources an owner or founder contributes from their individual assets.

Retained profits

The value of finance that the business keeps (after paying taxes to the governments and dividends to its shareholders) to use within the business

Sale of assets

When the company sells individual assets to another company for cash.

Share capital

The total amount of money a company raises by selling shares to investors

Loan capital

The capital needed to run a business. The capital is raised from borrowing rather than from the sale of shares.

Overdrafts

A line of credit on your business bank account that gives you more short-term cash flow than your business can fund from its own capital

Trade credit

A short-term financing arrangement between a business and a supplier allows a customer to receive goods or services now and pay for them later 

Crowdfunding 

A method of raising business capital by gathering small contributions from a large number of individuals

Leasing

A financial arrangement where a company pays a fee to a leasing company for a temporary fixed asset over a period of time.

Microfinance providers

Organizations that offer financial services to low-income individuals and small businesses

Business Angels

A private individual with a high net worth who directly invests part of their assets in new growing private businesses