Finance. I will be describing what internal and external sources are. I will then state which finance source Asda are most likely to use and why.

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Unit 2 P4

Introduction

In this piece of coursework I will be describing what internal and external sources are. I will then state which finance source Asda are most likely to use and why.

Internal sources

Internal sources of finance can be either from a businesses owner’s own saving or from the profit the business makes.

Owner’s fund

The owner of a business might have to use there own savings to start there own business, especially if they are a new sole trader. This is a person who owns and runs the business at the same time. The reason why their owners might have to start of by using their savings is partially because banks are not willing to take any risks and invest someone quickly.

Retained profit

Retained profit is when the money that is saved goes back to the business in order for it to grow and get even bigger. When a business makes a profit, the owners have a choice: either take out it the profit from the business by way of dividend, or reinvest it by leaving profits in the business. 

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Selling assets

Selling assets is any item that is owned by an individual or , especially that which could be converted to . Examples are cash, , , , office equipment, , a car, and other .

External sources

External sources of finance can be funded to help the business. They get help from a number of different external sources.

Government grants

A grant is money that the government give to an entrepreneur that does not have to be paid back. The amount the government gives to the entrepreneur depends on ...

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