Sources of finance

There are many factors that will influence the types of finance a business decides to use:

  • the purpose of the finance
  • objectives of the organisation
  • amount of finance required
  • the type of business (not all sources of finance are available to all businesses)
  • length of time the finance is required for

Sources of finance - shares, bank loan, crowdfunding, mortgage, loan from family/friends, overdraft

The main sources of finance are:

  • bank overdraft
  • bank loan
  • grant
  • mortgage
  • share issue
  • owner investment
  • loan from family or friends
  • hire purchase
  • crowd funding
  • leasing
  • retained profit
  • venture capital

There are justifications for using each source of finance and it is important that a business chooses the appropriate source of finance for their needs.