Internal Sources Of Finance Are

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Internal sources of finance are: “Organic growth”- This is when the business sponsors itself to grow and develop. It can be attained through: Generating increasing sales- increasing in revenue to increase the overall gain. Use of retained profit- reinvesting retained profit back in the business. Sale of assets- facilitate financing of the company, but reduced its capacity, because selling of assets can reduce the ability of the business to expand in the future. Depending on the time, external sources of finance available to the companies can be divided into 3 main types: Short –term finance-can be used for short periods of time up to one year to cover fluctuations in cash flow (trade credit, bank overdraft, factoring, bills of exchange) Medium-term finance- those sources that a company should pay back in 1 to 5 years (bank loans, hire purchases, leases, credit sale).Choosing loans for medium term financing from companies mean that they have to pay interest and may also have to show they have enough
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