26, 27, internal and external finance

Name 3 sources of internal finance

-owners capital

-retained profits

-sale of assets

What are the advantages of using internal finance

-capital is available immediately

-no interest payments

-no need to involve third parties

Disadvantages of internal finance

-can be difficult to obtain

-limited to the amount available within the business

-interest payments

Give 5 external sources of finance

-family and friends

-bank loan

-peer to peer lending

-crowd funding

-overdraft

Define debenture

A long term loan to a business

Define what authorised share capital means

- the maximum amount that can be legally raised from shares