Sources of Finance

Sources of finance

These are how businesses get money to finance growth, to overcome working capital / cash flow problems etc.

Choosing the right source of finance – Businesses need to consider several factors when deciding what sources of finance to use:

  • External sources of finance are more expensive as you need to pay interest
  • To use retained profits you need to get agreement from shareholders
  • The source of finance chosen also depends on the time period and what you need the finance for