External/Internal sources of finance

Retained profit

Money kept from a business to fund for future expenditure.

Net current assets

Money available from a business to fund day to day expenditure

Sale of an asset

The business selling their intems of value, to achieve a cash injection from external sources

Owners capital

The owner of the business putting their own money in the business, likely from their savings

Bank loan

Money burrowed from a bank, that you have to pay back

Mortgages

Long term loans to fund the purchase of assets e.g. property

Hire purchase

Paying to use an asset with regular monthly payments, eventually to own it

Debt factoring

Selling the debts of a business to a third party, to get a quick cash injection

Peer to peer lending

One business person lending money to another business person, in return for interest payments

Leasing

Paying to use an asset in regular monthly payments, but never owning it

Trade credit

A time offered by suppliers for costumers to make a purchase and pay for it later, usually 30 days after purchase

Goverment grants

Sum of money the goverment gives to a business or charity, and doesn’t have to be payed back

Crowd funding

Attracting investments from a large number of speculative investors, who take high risk financial bets aiming for profit in return

Donations

Money people give voluntarily to a business or charity

Business Angel

Money that an experienced business person gives to business, in return for equity

invoice discounting

A business selling its unpaid invoices to a lender at a discount to get immediate cash