43 sources of finance

==sources of finance== - where the money comes from

%%retained profit- (reinvested)%% most companies pay out some profit as dividends to share holders and the rest goes back into the business to grow. retained profit does not need to be paid back but there might not be enough profit to allow business to grow at its full capacity. don’t have to pay back but taking money away from shareholders.
%%cash from day to day finances-%% cash can be generated by cutting stock, delaying payments to suppliers, having up customers who owe money. this reduces amount that needed to be borrowed but is a short term solution
%%debt factoring-%% when business sells its account receivables for a discount which allows the business to unlock cash tied up in unpaid invoices without having to wait for usual payment.

%%bank overdrafts-%% bank allows business to overdraw a certain agreed amount even when they haven’t run out of money. business can borrow when they need and how much they need. but its expensive and bank can be insisted of being repaid.
%%trade credit%% - business gets goods from another company but doesn’t pay immediately. but businesses can be reluctant to trade if they dont get paid in time - trust needed
%%bank loan -%% medium term finance - no need to pay back until contract says so.
%%venture capital%% - way of getting outside investment for businesses that are unable to raise finance through stock markets or loans. they invest in riskier and smaller companies but to compensate they get a large amount of ownership.