Business 2.1.1 Internal sources of finance

• What is finance? 


  The money available to spend on business needs.
• What does a business need finance for?

  To pay employees and suppliers. Product creation. Advertising / Promotion. To cover costs. Market Research. Moving to new premises. Day to day running of the business. Enter new markets. Takeover / Aquisition. Finance expansion / Production capacity.To pay employees and suppliers. Product creation. Advertising / Promotion. To cover costs. Market Research. Moving to new premises. Day to day running of the business. Enter new markets. Takeover / Aquisition. Finance expansion / Production capacity.
• What is owner‘s capital?

  Involves the owner of the business investing their own money into the business venture.
• What does Owner’s capital include?

  Personal Savings. Redundancy payments. Inheritance. Personal Credit cards.
• What are the advantages of owner’s capital?

  Keep 100% of the business. In the case of personal savings, there will be no interest to pay. No delay in obtaining the finance.
• What are the disadvantages of Owner‘s capital?

  In the case of personal savings, the amount raised depends on the owner’s personal savings. If the business fails the owner stands to lose their investment. Could put a strain on family and personal relationships.