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Sample Finance Paper On Sources of Funding

Homework Question on Sources of Funding

  • You are in a small business as a sole trader. You wish to purchase some new machinery costing £50,000. Capital expenditure may be financed by a variety of external sources (as well as internal). Capital investment appraisal is an important decision making function. The selection of a particular project and the most appropriate means of financing it are difficult decisions to make. As a senior manager you will receive some expert advice on what you can do. Ultimately, the final decision will be one for you.
  1. Review of the sources of funding available to business and service industries. (Advantages and Disadvantages of each sources of funding) and pick one of source of funding explain it in relation to the SCENARIO.
  2. Evaluation of the contribution made by various methods of generating income for a large chain of restaurants.

Homework Answer on Sources of Funding

Time, effort and money are required at the start of a business. While time and effort may be easy to plan for especially in a sole proprietorship, money may not be as easy to come by as effort and time for a startup. There is a wide range of sources of business funding depending on the amount of funds required, how fast the business wants the funds and the willingness of the business to either retain or relinquish control of the business.

Businesses may need funds for completion of a project, an addition to the capital, for expansion or for purchase of necessary equipment. Each source of funding for a business comes with its share of advantages and disadvantages. While all of the sources may show promise as funding sources, it is imperative that the business owner carefully considers all the funding sources on their merits and limitations.

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This is in addition to a consideration of which among the sources shows better promise, with less restrictions on the business in terms of repayment or pressure for repayment, particularly in relation to the interest charged and the repayment period.Alternatively, diversification of the sources of income as is the case of chain restaurants may also work as a source of income. What are the available sources of funds for a business, what are their strengths and their limitations, and what sources of income do chain restaurants have.