internal external sources of finance

• internal sources of finance

  • owners equity
  • retained profits
• External: debt - short term

  • overdraft: overdrawing bank account
  • commercial bills: short term loan for a large ammount
  • factoring: selling accounts recieveable to a third party
• External: debt - long term

  • morgage: loan secured through property
  • debenture: loan from investors for a fixed rate and period
  • unsecured note: loan from investors not secured against companies assets
  • leasing: payment for equipment owned by another party, financial lease: asset whole life, operating lease: less than life
• Equity: ordinary shares

  • New issue: shares sold for the first time on ASX
  • Rights issue: invitation to existing shareholders to buy more shares
  • Placements: discounted for specific investors to invest a large sum
  • Share purchase plans: offer existing shareholder to purchase new shares with no brokerage fees at a discount
• equity: private equity 


  money invested in a private company not on ASX