3.1 Sarah and Jack: sources of funding
Task 1:
Sarah and Jack both have £500 of their own savings that they are willing to invest in the
business.
1. Full Control and Ownership: By utilizing their own savings, Sarah and Jack maintain
complete control over their business. They will not face external pressures from lenders
or investors, allowing them the freedom to make decisions without needing approval or
input from others. This autonomy can be crucial in shaping the direction of the business
according to their vision and values.
2. No Interest or Repayments: When Sarah and Jack use their personal savings, they will
not have to worry about paying interest on borrowed funds. This absence of interest
payments can positively impact on the business’s initial cash flow. Unlike loans or credit,
there is no obligation to allocate a portion of profits towards repaying debt.
Task 2
Prepare a presentation advising Sarah and Jack of appropriate sources of finance for starting
their business.
Source of finance: Advantages: Disadvantages: How appropriate? Justify:
No interest or Limited funds: Suitable for initial
Personal repayment Depending solely investment due to ease and
savings: obligations: Using on personal control but limited in scale.
Task 1:
Sarah and Jack both have £500 of their own savings that they are willing to invest in the
business.
1. Full Control and Ownership: By utilizing their own savings, Sarah and Jack maintain
complete control over their business. They will not face external pressures from lenders
or investors, allowing them the freedom to make decisions without needing approval or
input from others. This autonomy can be crucial in shaping the direction of the business
according to their vision and values.
2. No Interest or Repayments: When Sarah and Jack use their personal savings, they will
not have to worry about paying interest on borrowed funds. This absence of interest
payments can positively impact on the business’s initial cash flow. Unlike loans or credit,
there is no obligation to allocate a portion of profits towards repaying debt.
Task 2
Prepare a presentation advising Sarah and Jack of appropriate sources of finance for starting
their business.
Source of finance: Advantages: Disadvantages: How appropriate? Justify:
No interest or Limited funds: Suitable for initial
Personal repayment Depending solely investment due to ease and
savings: obligations: Using on personal control but limited in scale.
