BM sources of finance

Internal sources of finance

• retained profit

• sales of unwanted assets

• reductions in working capital

• Sale and leaseback of non-current assets

External sources of finance (short term)

• bank overdraft

• trade credit

External sources of finance (medium term)

• hire purchase

• leasing

• medium bank loans

External sources of finance (long term)

• share capital

• debentures

• Bank (long term) loans

• business mortgage

bank overdraft

An arrangement with a bank that their customer can withdraw up to an agreed limit from their account as and when required.

hire purchasing

an asset is sold to a company which agrees to make fixed repayments over an agreed time period

equity finance

permanent finance raised by companies through the sale of shares.