sources of finance

profit as reported by income statement of the business firm. It should be understood that this

A public share issue can be done, selling equity on the public markets. At present, this option does not look particularly viable for a couple of reasons. The main reason is that the company is in poor financial condition. Equity investors may be unwilling to either buy into the company, or they would do so at a steep discount to what the company might eventually be worth. In the latter case, the company could severely undervalue its equity, constricting the ability of the company to extract value in the future. If it ends up selling a stake greater than 49%, there are also control issues as well that would arise from selling that much equity.

Basic source of finance are shareholders & borrowed funds. Business finance loans are one of the most feasible sources of finance gathering tool for any company. In order to expand or to start a new business, the business financing plays a vital role in the modern day’s market.

Furthermore, they did mention that internal funds are cheaper in certain circumstances and there are more options for firm to choose, since it is very hard to justify the real world financial strategy problem with a formula (Modigliani and Miller, 1963). Brusov,

To start a business there can be few major financial options available and most of it would be greatly used, provided the risk analysis is done

To make the business viable for the years next few years if the business will expand its operations, the business may need to raise additional 60% external financing from debt, implying that a proportion of the capital is funded by debt. The remaining 40% is sourced by increasing the reinvesting the profits of the business and obtaining venture capitalist investors to complete the financing needs of the business.

In business, companies will always have to raise capital at some stage either because a company needs start-up capital or needs capital to expand. This is an important part of the financial planning structure for businesses because they all require an initial investment to meet their requirements. The majority of people automatically think Initial Public Offering (IPO) when they hear of a company raising capital. It is the basic procedure for a company to make it publicly known that they are selling their securities. In reality, raising capital can be done in many ways, which include loans, leasing and getting investors, which are all classified as small-scale ways of raising capital. Larger ways of raising capital are attracting angel investors, venture capitalists and offering equity. Starting a business without a steady income and constant lessening of whatever savings you may have is one of the most difficult circumstances to be under. For my own business I have used my savings and personal credit, which unfortunately is a limited supply of money. The need for capital never ends and that is why considering your market need, potential competition, risk & return and sources of potential funding are essential to look at before making any decision involving raising capital.

Owners’ savings- the owner of a business often has to use their own personal savings to start a business, particularly if they are a sole trader. This is because banks may not be willing to take a risk and invest in them. Savings are a good source of finance for a business, as interest does not need to be paid to someone else while the money is being used, and the business remains totally in the control of the owner. In any business venture it is always an advantage to be using your own money because the freedom of spending it how you please is up to you, however there is a high risk factor with personal savings, the chance of losing

“Organic growth”- This is when the business sponsors itself to grow and develop. It can be

- The positive gain from an investment or business operation after subtracting for all expenses. Opposite of loss.

As a start-up, finance is constantly a challenge. They want always to achieve a positive cash flow. The major issue that it can encounter: cash flow, supply chain, quality assurance and the customers have the power of buying and choose.

In effect selling shares off would mean more dividend from shares. This would result less money in the company after the initial payment. I would use this as a last resort.

The financing of every business is the most fundamental aspect of its management. Get the financing right and the company will have a healthy business, positive cash flows and ultimately a profitable enterprise. The financing can happen at any stage of a business 's development. On commencement of your enterprise the business entity will need finance to start up and, later on, finance to expand.

It is noted that finance is one of the most important part of the business that play a vital role to run the key activities of a business viably either it is a manufacturing business or a service it required adequate amount of resources to attain their set goals. Moreover, it is important from the prospect of CCA firm to consider different types of sources of finance in order to fulfil their requirement and start HEC (Higher Education College). There are different sources of finance that must be considered by CCA as per their requirements because both short and long-term finance require different things to get these finances. There are two most common types of sources of finance that are as follows:

The initial owner financing which are also called the personal savings. It is the backbone of some small business. As it owned by the owners it can be directly used to help the company suffer from the financial risk. Robert Gibson (2014) has