Sources of Finance

business angels

Wealthy individuals who invest their own money in small- to medium-sized businesses with high growth potential.

crowdfunding

Raising finance for a business or project by gathering small amounts of money from a large number of people, usually online.

external sources of finance

Funds obtained from outside the organization, such as loans, overdrafts, or selling shares.

initial public offering (IPO)

When a business becomes a publicly traded company by selling shares on a stock exchange for the first time.

internal sources of finance

Funds generated from within the organization, like personal funds, retained profit, or the sale of assets.

leasing

Renting an asset from its owner, where the lessee pays regular fees to use it.

loan capital (debt capital)

Medium- to long-term finance from lenders, such as mortgages, business loans, or development loans.

long-term sources of finance

Funds available for more than 12 months, used to purchase fixed assets or expand a business.

microfinance

Financial services for small entrepreneurs, often aimed at low-income groups or women.

overdrafts

A short-term borrowing option allowing businesses to spend more than is in their bank account, up to a set limit.

personal funds

Savings used by an entrepreneur to finance their business, common for start-ups.

retained profit

The portion of a business's profit kept for reinvestment after paying taxes and dividends.

sale of assets

Selling unused or obsolete assets to generate cash.

share capital

Money raised by a company from selling shares.

share issue (share placement)

Raising additional finance by selling more shares in an existing company.

short-term sources of finance

Funds available for less than a year, used for day-to-day operations, like overdrafts or trade credit.

sources of finance

The various ways businesses obtain funds, such as personal savings, loans, or share capital.

stock exchange

A regulated marketplace where shares of publicly traded companies are bought and sold.

trade credit

An arrangement where a business can buy goods or services and pay later, typically within 30–60 days.