2.1 Raising Finance
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Last updated 7:55 PM on 5/14/25
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4 Terms
1
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Retained profit
Profit kept in the business after tax and dividends.
- No repayment or interest; – May limit reinvestment elsewhere.
2
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Sale of assets
Selling unused buildings/equipment.
- Frees up cash; – Not sustainable long term.
3
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External resources
Loans: Borrowed from banks; paid back with interest.
Share capital: Selling shares (Ltd or PLC).
Overdrafts: Short-term, flexible borrowing.
Venture capital: Investors in exchange for equity.
4
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🧠 Key idea
Match the source to the business’s situation (start-up vs established, short-term need vs long-term investment).
