What you'll learn
How businesses raise the money they need.
Key ideas
- Internal sources: retained profit, selling assets.
- External sources: loans, overdrafts, share capital, leasing and grants.
- Short-term vs long-term finance.
Exam tips
- Match a source to the business's needs.
- Weigh cost and risk of each source.
Common mistakes
- Confusing internal and external sources.
- Ignoring the cost of borrowing.