Question

In: Finance

Briefly state and explain other sources of business finance.

Debt and equity financing are two main sources of business. Briefly state and explain other sources of business finance.

Solutions

Expert Solution

a)Trade Credit: A source of financing in which inventory is obtained
by the buyer on credit. It is unsecured loan which is interest free.

b) Customer Credit: A source of business capital provided by
customers who pay a certain percentage of the total cost of an item to
the seller as a down payment at the time the order is made.

c) Networking with other Entrepreneurs: A source of business
financing in which entrepreneurs cooperate with other and enter into
agreement to share certain costs through part production.
d) Internal Cash Management: A source of obtaining business
financing by entrepreneurs practizing sound internal business
management decision to conserve cash. 

c) Venture Capital: This is a valuable source of financing in which
professional people with capital provide a full range of financial services for new or growing venture.


Trade Credit, Customer Credit,Networking with other Entrepreneurs, Internal Cash Management and venture capital.

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