Task 4: Describe sources of internal and external finance for a
selected business (P4)
There are two main ways that businesses can assess financial resources within the business and from
outside the business.
Capital from profits
Internal source of finance can be from the profits a business makes. They can use the capital from
the profits. When a business makes a lot of profit than the owner of the business can decide how
much they want to invest back in the business to expand it. It depends maybe the owner doesn’t
want to use it for expansion or for themselves.
Banks
A bank is an organization where people and businesses can invest or borrow money, change it to
foreign money etc. It can also be a building where these services are offered. A bank is steady.
Once you’ve come to an agreement with a bank you know that they will do their part as long as you
do yours. It’s official and you have a contract so no surprises which makes it safe. The biggest
advantage of a bank loan is that when everything is approved you get the money immediately.
Another advantage is that as a business can always get advice from a financial banker at the bank.
They are there for you to answer your questions. ING (a bank in The Netherlands) also has an easy
way to insure you for any kind of risks as a new business, they. The disadvantage of a bank loan is the
interest you must pay over the loan you are getting. If you don’t pay the interest like it says in the
contract on time. You will build up a debt which makes getting a loan in the future hard to almost
impossible. I provide ING Zakelijk as an offer, because I’m also a member of them. Banks are
generally free to decide the interest rate they will pay for you if you save your money in their bank
and the interest rate for the loans. They look at their competitors how much percent their interest is,
so that ING can decide their interest rate. The rates that ING Zakelijk have is the account information
in digital form, hard copy and the request for statement. Interest Rate depends on how much you
want to put in. The minimum input for the ING Zakelijk deposit is €25.000 therefore you get an
interest percentage of 0,25% this can be for 5 years or 10 years. The minimum input for Vreemde
Valuta deposit is €500.000 therefor you get a standard interest and you can choose how long the
duration is. ING Zakelijk has three different forms for maximum amounts. The first one is the
Rentevastlening, the second one is the Euribor Optimaal Lening, the third one is the financiering met
staatsgarantie. The best loan that suites for Financial Meltdown is the financing with staatsgarantie.
This is because the Dutch government will give Financial Meltdown a guarantee of 90% even when
they are not sure that they can pay everything back, the interest rate has a fixed percentage and
therefor it will not change. This loan is available for Financial Meltdown when they invest at least
€35.000. If you would like to apply your business as a member of ING, then you must fill in an
application letter, which you can find on the site. After that you will receive an email with an
overview of data you still must send them, so they can control your request. You will also have to
send them a few documents. they can ask you for your taxation, some recent annual figures, lease
agreement or a business plan. After submission of all the documents you will receive an answer to
your financing request from one of their specialists or consultants within 24 hours. If funding is
approved, you will also receive a quotation. Credit applications of more than €250.000 will receive
provisional quotations only. If you accept the offer you have your limit within another 24 hours, if all
certainties are established and the conditions are met.
(ING Zakelijk, sd)
selected business (P4)
There are two main ways that businesses can assess financial resources within the business and from
outside the business.
Capital from profits
Internal source of finance can be from the profits a business makes. They can use the capital from
the profits. When a business makes a lot of profit than the owner of the business can decide how
much they want to invest back in the business to expand it. It depends maybe the owner doesn’t
want to use it for expansion or for themselves.
Banks
A bank is an organization where people and businesses can invest or borrow money, change it to
foreign money etc. It can also be a building where these services are offered. A bank is steady.
Once you’ve come to an agreement with a bank you know that they will do their part as long as you
do yours. It’s official and you have a contract so no surprises which makes it safe. The biggest
advantage of a bank loan is that when everything is approved you get the money immediately.
Another advantage is that as a business can always get advice from a financial banker at the bank.
They are there for you to answer your questions. ING (a bank in The Netherlands) also has an easy
way to insure you for any kind of risks as a new business, they. The disadvantage of a bank loan is the
interest you must pay over the loan you are getting. If you don’t pay the interest like it says in the
contract on time. You will build up a debt which makes getting a loan in the future hard to almost
impossible. I provide ING Zakelijk as an offer, because I’m also a member of them. Banks are
generally free to decide the interest rate they will pay for you if you save your money in their bank
and the interest rate for the loans. They look at their competitors how much percent their interest is,
so that ING can decide their interest rate. The rates that ING Zakelijk have is the account information
in digital form, hard copy and the request for statement. Interest Rate depends on how much you
want to put in. The minimum input for the ING Zakelijk deposit is €25.000 therefore you get an
interest percentage of 0,25% this can be for 5 years or 10 years. The minimum input for Vreemde
Valuta deposit is €500.000 therefor you get a standard interest and you can choose how long the
duration is. ING Zakelijk has three different forms for maximum amounts. The first one is the
Rentevastlening, the second one is the Euribor Optimaal Lening, the third one is the financiering met
staatsgarantie. The best loan that suites for Financial Meltdown is the financing with staatsgarantie.
This is because the Dutch government will give Financial Meltdown a guarantee of 90% even when
they are not sure that they can pay everything back, the interest rate has a fixed percentage and
therefor it will not change. This loan is available for Financial Meltdown when they invest at least
€35.000. If you would like to apply your business as a member of ING, then you must fill in an
application letter, which you can find on the site. After that you will receive an email with an
overview of data you still must send them, so they can control your request. You will also have to
send them a few documents. they can ask you for your taxation, some recent annual figures, lease
agreement or a business plan. After submission of all the documents you will receive an answer to
your financing request from one of their specialists or consultants within 24 hours. If funding is
approved, you will also receive a quotation. Credit applications of more than €250.000 will receive
provisional quotations only. If you accept the offer you have your limit within another 24 hours, if all
certainties are established and the conditions are met.
(ING Zakelijk, sd)
