There are a number of different
places where a business can raise its money to buy premises, equipment, machinery
or stocks. There are a number of different
places where a business can raise its money to buy premises, equipment, machinery
or stocks.
OWNERS FUNDS the owner can
put in their own money; it might be from savings, an inheritance or borrowed
from family and friends
ADDITIONAL PARTNERS the business
can take on one or more partners to inject more money
RE-INVESTED PROFITS a business
can put back in the profits that it has earned
SHARE ISSUES a business can
issue shares to family and friends if a private limited company, on the Stock
Market if a public limited company
LOANS AND OVERDRAFTS
the business can take out a loan that it repays each month or an
overdraft which means that it can take out more money than it has in its bank
account, up to an agreed limit
HIRE PURCHASE when supplies
are obtained they are paid for gradually and only owned by the business when
they are paid off
LEASING this is similar to
hire purchase but involves the company renting equipment
TRADE CREDIT - the business does
not pay for goods straight away but within an agreed period
GOVERNMENT GRANTS businesses
can obtain grants from local and central government to set up in particular
areas in order to help create wealth and jobs. One example is the Training and
Enterprise Councils (TECs). They offer grants to unemployed people who set
up their own businesses. They also offer training and support in exchange for
a BUSINESS PLAN