• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Describe sources of internal and external finance for a selected business.

Extracts from this document...

Introduction

P4: Describe sources of internal and external finance for a selected business. Tesco: Internal sources: Internal sources of finance can be from the business owner?s savings or from profits. * Owner?s savings: The owner of a business often has to use their own personal savings to start the business, particularly if they are a new sole trader (a person who owns and runs their business). This is because banks may not be willing to take a risk and invest in them. Savings are a good source of finance for a business, as interest does not need to be paid to someone else while the money is being used, and the business remains totally in eh control of the owner. The owner of tesco can use his savings and start up the business. ...read more.

Middle

* Banks: Banks are able to offer loans, business accounts, commercial mortgages and overdraft facilities based on the business plan. Interest is payable based on the predicted risk. Some security will need to be provided, for example, assets such as a house. Bank can provide loan to tesco. * Building societies: Building societies are also able to offer loans, business accounts, commercial mortgages and overdraft facilities based on the business plan. Interest is payable based on the risk of the venture. As with banks, some security will need to be provided, such as assets. Tesco has a good history so building socities can provide loan to tesco. * Hire purchase: Hire purchase means that resources can be used by the business while they are being paid for to a finance company. ...read more.

Conclusion

Limited companies are then able to sell shares on the stock exchange if they become public limited companies (PLC). This is known as floating on the stock exchange. Sometimes large PLCs will have a new share issue as well when they want to invest in a large project and these are also floated on the stock exchange. Tesco can issue shares. * Government grants and Prince?s Trust loans and grants: These are available from the EU, national government and local government. A grant is money given to an entrepreneur that does not have to be paid back and the amount of that money will depend on where it is coming from(for more information, see www.businesslink.gov.uk). Businesses run by people between the age of 18 and 30 can apply for low-interest loans from the Prince?s Trust (www.princess-trust.org.uk). Tesco can have government grants and loans as it is an old business and has a very good history. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Accounting & Financial Management section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Accounting & Financial Management essays

  1. Advantages and Disadvantages of the various sources of finance available to businesses.

    degrees of influence over the management of your business and making of major decisions. Resources for your business. The right venture capitalists can bring valuable skills, contacts and experience to your business and can assist with strategy and key decision making where needed.

  2. Sources Of Finance

    A bank loan can be used as a source of finance to set up this type of business venture, as this is usually a larger type of business structure than most other businesses so is harder to set up financially as well.

  1. Assignment 4: ethical issues. The community. P4 and M3

    Resources from: http://www.un.org/en/documents/udhr/ European Union: The European Union (EU) is a partnership of 27 democratic countries, working together for the benefit of all their citizens. It aims to promote social and economic progress among its members, common foreign and security positions, police and judicial co-operation in criminal matters, and European citizenship.

  2. Edexcel Applied Business A2 unit 11 finance task A

    Longer term sources of finance (liabilities) and (Non current liabilities) Long term borrowings Thomas Cook's long term borrowings are things such as, bank loans for mortgages. Mortages is normally used as a loan for a house, so people can repay small amounts over a period of time.

  1. A2 Business CourseWork

    A market share is important to any business because it is a good indicator as to how you are doing against your competitors. Aim - Maintain and improve market share: Any business will probably have the same aim with regards to market share.

  2. Describe sources of internal and external finance for a business

    Furthermore, there are external sources of finance. 2) External sources of finance are found outside the business. External sources of finance include: The bank The owner of the business could obtain a loan. A loan is when you borrow money from the bank; this money can then go towards the business.

  1. Sources Of Finance and Profit and Loss Accounts.

    at less than full value to an agent, who then has the responsibility for collecting that debt. Creditors And Debtors A creditor is an individual or business that has lent funds to a business and is owed money. A debtor is an individual or business who has borrowed funds from a business and so owes it money.

  2. Roles of Banks and Building societies.

    Britannia House, Cheadle Road, Leek, Staffordshire, ST13 5RA Buckinghamshire Building Society High Street, Chalfont St Giles, Buckinghamshire, HP8 4QB Cambridge Building Society Century Building Society Chelsea Building Society (A trading name of Yorkshire Building Society) Cheshire Building Society (A trading division of Nationwide Building Society)

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work