3.2 Sources of Finance

• The 3 types of internal sources of finance are personal funds, retained profit and sale of assets.
• The 4 types of external sources of finance are share capital , loan capital , overdrafts , trade credit , crowdfunding , leasing , microfinance and business angels.
• Short term finance repayment period is within the next 12 months.
• An overdraft allows a business to temporarily take out more money than it has it its bank account.
• Trade credit allow a business to buy and pay later.
• Microfinance is financial services for entrepreneurs from disadvantaged sectors of society.
• Business angels are wealthy individuals who invest their own money in businesses that offer high growth potential but come with high risk.
• Long term finance repayment period is more than 5 years.