Finance - Sources of Finance



Sources of Finance
There are 4 Different sources.

  1. Private and Family - Funds from private and family sources.
  2. Debt Financing - Borrowing money from others.
  3. Equity Financing - By sale of an interest in the business.
  4. Other Financing - Other sources such as Trusts, Grants etc.

1. Private and Family Finance

This type is what is known as Self Funding. Money is raised by you and your friends. It can come from private savings and family loans etc.

It is the best type of funding because there are generally minimum obligation to any other party (except relatives and friends) and the interest rates are lower than other sources. It has its advantages as well as disadvantages however.


2. Debt Financing

A debt is a direct obligation that you have to pay cash to someone who has lent you the money in the first place. It is an obligation that you have to an investor or lender. The invest...

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