Finance in the Hospitality Industry

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Programme: Higher National Diploma (HND) in Hospitality Management Unit Title and Number: Finance in the Hospitality Industry (Unit 2) QCF Level: 4 Table of Contents INTRODUCTION: .................................................................................................................. 3 P 1.1 .................................................................................................................................................. 3 P 1.2 ......................................................................................................................................... 7…show more content…
You just need to be fierce and well prepared, as financiers want to see a lot of determination all the way, to be completely involved in the “game”. I am going to present in this report the sources of finance available for businesses and services industries as well the sources I chose for my business having to purchase a £50.000 machinery. P 1.1 There are two main types of sources of finance:  Internal  External As for time horizon:  Long-term  Short-term 1) Owner Financing-Capital is an internal source of finance, it represents own investment in the business directly, unwilling to pay the market interest rates. www.investopedia.com Advantages: no loans costs, fast closing on the purchase or sale. Disadvantages: Presumably paying a higher sales price (higher than average because the buyer did not obtain traditional financing) having to invest a large amount of money immediately. www.creonline.com/benefits-of-owner-financing.html 2) Bank overdraft is an external source of finance. A certain amount is added to your bank account with the possibility of overdrawing. You are being charged interest based on the amount you are borrowing and time length and usually charged a fee for using the facility. This source of finance is useful when you have regular sales and purchases made from your account that could cause bad cash flows situations.
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