Internal sources of Finance

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6 Terms

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Owners Capital

money invested into the business by the owner

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Advantages of owners capital

no interest and 100% ownership and control is kept

3
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Disadvantages of owners capital

could strain personal finances and there might no the enough to support the business

4
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Retained Profits

money made from sales reinvested into the business

5
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Advantages of Retained profits

improves company liquidity and can reinvest into the company for growth

6
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Disadvantages of Retained profits

shareholders may be unhappy at lowers dividends and the business becomes less attractive to investors