2.1.2 - external finance

family and friends

small business owners approach close acquaintances to invest in or lend money to a business

peer-to-peer funding

individuals with available savings pool it with others in a peer investment scheme

business angels

some individuals specialise in making investments in start-up or expanding businesses

crowdfunding

allows businesses to access finance provided by a large number of small investors on online platforms

joint venture / other businesses

it may be possible for a business to access finance via a joint venture with another business, such as key or customer supplier

bank loans

business may go to banks in order to raise finance for their business

share capital

raise finance through selling some of their shares either on stock exchange or privately

venture capital

investors invested in exchange for an equity stake in the business ( risky )

grants

a fixed amount of money usually awarded by the government, EU or charitable organisation when the business meets certain conditions

leasing and hire purchase

renting apiece of equipment or machinery ( items belong to the leasing company )

overdraft

provided when business makes payments from their business current account exceeding the available cash balance

trade credit

business may be given a period of credit, normally around 30-60 days