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Questions and Answers
Which of the following is NOT an internal source of finance?
Which type of business entity usually relies on personal funds from their own savings to finance their start-up businesses?
Which source of finance does not need to be repaid?
Which of the following is an example of an external source of finance?
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What are the three main sources of internal finance?
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Study Notes
Internal and External Sources of Finance
- An internal source of finance is NOT a loan from a bank.
Business Entity and Start-up Finance
- A sole trader usually relies on personal funds from their own savings to finance their start-up businesses.
Repayment of Finance
- A grant is an example of a source of finance that does not need to be repaid.
External Sources of Finance
- A loan from a bank is an example of an external source of finance.
Main Sources of Internal Finance
- The three main sources of internal finance are:
- Retained profits
- Sale of assets
- Reduction of working capital
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Description
Test your knowledge on the different sources of finance for businesses. Learn about internal and external sources and how they contribute to funding a business. Explore concepts such as personal funds, share capital, and bank loans.
