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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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Introduction

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. ...read more.

Middle

The people that buy these for leasing/hiring pay for them and use them but do not own them. Hire purchase Hire purchase means that resources can be used by the business while they are being paid for by a finance company. However, when the last payment is made the goods are not owned by the business anymore. Issuing shares Issuing shares is a very good way for companies/businesses to raise finance. Small business will issue shares when they are transferring from sole trader or partnership to become limited, LTD. Limited companies are then able to sell shares. However, sometimes PLC's businesses will be able to have a new share issue and if they choose to invest a project they can. Venture capital These are people who invest in new things and usually return for a share of the owner ship. Venture capitalists provide money when banks have refused. Bank loans All banks offer loans. ...read more.

Conclusion

Bank loans give Asda loans so that Asda can use the money on equipment, transport, pay there staff, training etc. Loans must be paid back to the bank, so once Asda have taken a loan from the bank they would give you a certain time to pay it back. Asda often hire/lease property, machinery and vehicles (assets) for a short period of time with a fee cost. When Asda are hiring or leasing property they make good money for it. The people that buy these for leasing/hiring pay for them and use them but do not own them. This money goes towards Asda and would help them gain more profit the more they hire their property. Asda hire people to deliver their stuff to customers when they order online. They also hire staff in order to serve the customers and keep the place running smoothly. Conclusion - Overall, in this piece of coursework I have described all of the sources that include internal and external. I have also spoken about the sources Asda would use. ...read more.

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