AC 11 Identify The Sources Of
AC 1.1: Identify the sources of finance available to a business.
Definition of Finance: The science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities. Finance consists of financial systems, which include the public, private and government spaces, and the study of finance and financial instruments, which can relate to countless assets and liabilities. Some prefer to divide finance into three distinct categories: public finance, corporate finance and personal finance. All three of which would contain many sub-categories.
Sources of Financing:
According to Kyra Sheahan if your business is new, old, large or small, financing is essential in helping your company to grow, expand and take on new organizational strategies. "Business finance" simply refers to money and is a necessary foundation for businesses to thrive. For a business owner, it is important to be aware of the various finance sources so you can determine which source best suits your business’s needs. (Sheahan, K. (nd)).
Commercial Bank Loans:
As loan is a source of finance, so we mostly take loan from commercial banks especially from that banks which give more facilities in repayment. While taking out a business loan from the bank is one way to finance your business ventures. The process begins by applying for the loan to a bank, which often requires the business owner to compose a loan proposal. The Small Business Administration says loan proposals must include a written description of the company’s history, which its competitors are and what the funds would be used for, such as an explanation of the project. If your company is approved, you and the bank can determine the details of the loan, such as what the interest rate is, what the duration of the loan will be and what the repayment grace period is. Pay special attention to the terms of the interest rate. If you can, get a fixed interest rate that does not fluctuate. Otherwise, you
Definition of Finance: The science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities. Finance consists of financial systems, which include the public, private and government spaces, and the study of finance and financial instruments, which can relate to countless assets and liabilities. Some prefer to divide finance into three distinct categories: public finance, corporate finance and personal finance. All three of which would contain many sub-categories.
Sources of Financing:
According to Kyra Sheahan if your business is new, old, large or small, financing is essential in helping your company to grow, expand and take on new organizational strategies. "Business finance" simply refers to money and is a necessary foundation for businesses to thrive. For a business owner, it is important to be aware of the various finance sources so you can determine which source best suits your business’s needs. (Sheahan, K. (nd)).
Commercial Bank Loans:
As loan is a source of finance, so we mostly take loan from commercial banks especially from that banks which give more facilities in repayment. While taking out a business loan from the bank is one way to finance your business ventures. The process begins by applying for the loan to a bank, which often requires the business owner to compose a loan proposal. The Small Business Administration says loan proposals must include a written description of the company’s history, which its competitors are and what the funds would be used for, such as an explanation of the project. If your company is approved, you and the bank can determine the details of the loan, such as what the interest rate is, what the duration of the loan will be and what the repayment grace period is. Pay special attention to the terms of the interest rate. If you can, get a fixed interest rate that does not fluctuate. Otherwise, you
References: No author (no date) Finance, Available at:http://www.investopedia.com/terms/f/finance.asp (Accessed: 8th November 2014). Sheahan, K. (no date) Different Source of Business Finance, Available at:http://smallbusiness.chron.com/different-sources-business-finance-4115.html (Accessed: 8th November 2014).