The business and owner are treated as one entity so creditors can request payment that requires the owner to sell their assets (sole traders and partnerships)
Limited Liability
The owner and business are separate entities thus their assets are not liable for business debts. This gives owners the confidence to get loans, but can lead to fraud
Finance for Unlimited Liability
Owner's capital, bank finance, leasing, retained profit and trade credit as banks and suppliers can recoup their cash and leasing avoids the cash drain
Finance for Limited Liability (1)
Share capital is sold to family and friends, bank finance for small firms needs collateral, business angels/venture capital is a mixture of share and loans with higher interest than bank loans and leads to a dilution of control
Finance for Limited Liability (2)
Peer-to-peer/crowdfunding gives more control to the owners, leasing/trade capital open to limited liability companies and profits are the biggest source
