Source of Finance

3105 Words Oct 17th, 2010 13 Pages
Table of Contents
I, INTRODUCTION:
II, TASK: TASK 1:
1. Identify and describe the various sources of finance 1.1 Internal source 1.2 External sources
2. Assess the implication of the difference sources of finance related to risk, legal, financial and dilution of control and bankruptcy 2.1 Issue debt 2.2 Issue equity
3. Select appropriate sources of finance and make recommendations on the best ways of raising finance TASK 2:
Part 1: Assess and compare various costs involve with each source of finance to Vale filters Limited
Part 2: Prepare cash budget for Vale filters Ltd. And discuss the importance of financial planning 2.1 The importance of financial planning 2, Prepare cash budget
III, APPENDIX
IV, REFERENCE
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It is often short-term finance and creditor require on time payment. - Grants: Grants is often provided by government . Business can get capital from government grants without repayment. However, government grants are only available for only some special business with high unemployment rate. - Venture capital: It is a source financed by the venture companies that feel the profit through investment to business. They also affect the operation of business and get profit through enterprise, such as dividend as shareholders. - Business angel: They are often rich people or entrepreneurial who invest to the new potential business by debt or equity. They often invest to start up and early stage business. - Factoring and invoice discounting:
Factoring: is allowed for the company which is selling by credit by factors. Factors give the businesses cash in advance (often up to 80% of the value of the debt) whether the debt is unsecured. They also supply the debtor management service that control and collect the debt from business debtors if business pay fees for them.
Invoice discounting: is also provide cash for business through purchase a selection of invoices with discount but business have to collect debts for them. It is only available for reliable and well-established companies - Leasing: is provided by leasing company

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