P4: Describe sources of internal and money the get back which could still leave
external finance for a selected business. an problem with their cash flow problems.
In this assignment I will be producing an Sale of Assets
information leaflet describing sources of
internal and external finance available for If your business has equipment lying
my selected business which in this case is
around that you don't use, you can raise
Tesco.
working capital by selling these.
Internal sources of finance
However this strategy only works if you
Working capital actually have equipment that another
business will pay for but this will only
Most small businesses need a working happen if your business actually needs it.
capital at some point during their business
lifetime, a lot of businesses face low cash If you are selling assets of finance then it
flow issues in the business environment. is vital to plan carefully and give yourself
All business owners are able to use credit enough time to sell them. However if you
lines or investments as well as short time own equipment that’s only useful to some
loans to improve their capital. industries then it make take some time
finding a suitable buyer.
Business expansion
External sources of finance
Small businesses usually require external
financing if they wish to expand their
business. Mortgages
Factoring This is a type of loan in which you can buy
properties through and certain properties
Factoring is an easier way for a business to can be worth a lot. Through this type of
pay off their dept and get money as quick loan people can pay monthly instalments
as possible instead of chasing each debtor to pay off the properties. This can last for
for money and wasting time. as long as it takes to pay it off for example
some take 4 years to pay off and other can
take 10.
An advantage of factoring is that it is an
easier way for the business to get rid of
An advantage of a mortgage is that you
their trade receivables if they don’t have can pay off the property in your own time
the time to find and track them down to as this option is made to fit certain
get the money back. This can help people’s life styles. Through this you can
improve the cash flow of the business and plan out a way of returning the loan.
reduces the burdens of chasing debtors.
However, few of the disadvantages of On the other hand mortgages are a long
factoring is that even though it can give term commitment and if you do not
the business instant money the business return the money or pay the property off
can have a reduction of the amount of on time then they will take it away from
you. After this you may find it hard to get
external finance for a selected business. an problem with their cash flow problems.
In this assignment I will be producing an Sale of Assets
information leaflet describing sources of
internal and external finance available for If your business has equipment lying
my selected business which in this case is
around that you don't use, you can raise
Tesco.
working capital by selling these.
Internal sources of finance
However this strategy only works if you
Working capital actually have equipment that another
business will pay for but this will only
Most small businesses need a working happen if your business actually needs it.
capital at some point during their business
lifetime, a lot of businesses face low cash If you are selling assets of finance then it
flow issues in the business environment. is vital to plan carefully and give yourself
All business owners are able to use credit enough time to sell them. However if you
lines or investments as well as short time own equipment that’s only useful to some
loans to improve their capital. industries then it make take some time
finding a suitable buyer.
Business expansion
External sources of finance
Small businesses usually require external
financing if they wish to expand their
business. Mortgages
Factoring This is a type of loan in which you can buy
properties through and certain properties
Factoring is an easier way for a business to can be worth a lot. Through this type of
pay off their dept and get money as quick loan people can pay monthly instalments
as possible instead of chasing each debtor to pay off the properties. This can last for
for money and wasting time. as long as it takes to pay it off for example
some take 4 years to pay off and other can
take 10.
An advantage of factoring is that it is an
easier way for the business to get rid of
An advantage of a mortgage is that you
their trade receivables if they don’t have can pay off the property in your own time
the time to find and track them down to as this option is made to fit certain
get the money back. This can help people’s life styles. Through this you can
improve the cash flow of the business and plan out a way of returning the loan.
reduces the burdens of chasing debtors.
However, few of the disadvantages of On the other hand mortgages are a long
factoring is that even though it can give term commitment and if you do not
the business instant money the business return the money or pay the property off
can have a reduction of the amount of on time then they will take it away from
you. After this you may find it hard to get
