advantages and disadvantages

• owners funds:

  • it provides quick and interest free source of fund
  • there is a greater financial risk
  • business owners need to be willing to face considerable risks
• retained profits:

  • provides an interest free source of funds
  • it is not always available
  • owners recieve less reward for their risks
• working capital:

  • efficient management of cash is good business practice

  
  

  • money is not always available - the business may have to use it's working capital for immediate expenses
  • a firm must ensure it still has sufficient inventory to meet customer demand
• selling assets:

  • can enable the business to release a large sum of money
  • the firm loses the use of asset
  • finance is only available if an asset can be sold