{"id":173,"date":"2023-03-02T09:55:37","date_gmt":"2023-03-02T09:55:37","guid":{"rendered":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n4businessmanagement\/?page_id=173"},"modified":"2023-03-02T12:23:03","modified_gmt":"2023-03-02T12:23:03","slug":"sources-of-finance","status":"publish","type":"page","link":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n4businessmanagement\/sources-of-finance\/","title":{"rendered":"Sources of Finance"},"content":{"rendered":"<p>Businesses need money to be able to pay bills, employees, buy machinery, equipment and raw materials.\u00a0 This money may eventually come from sales made, but in the beginning businesses may have to rely on different sources of finance.<\/p>\n<p>Different types of businesses can raise different sources of finance, though some are accessible to all types of businesses. The source of finance used depends on what the finance is for, and how long it is required for.<\/p>\n<p><a href=\"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/public\/n4businessmanagement\/uploads\/sites\/10340\/2023\/03\/02111532\/Screenshot-2023-03-02-111502.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-full wp-image-177\" src=\"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/public\/n4businessmanagement\/uploads\/sites\/10340\/2023\/03\/02111532\/Screenshot-2023-03-02-111502.png\" alt=\"\" width=\"439\" height=\"451\" srcset=\"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/public\/n4businessmanagement\/uploads\/sites\/10340\/2023\/03\/02111532\/Screenshot-2023-03-02-111502.png 439w, https:\/\/blogs.glowscotland.org.uk\/glowblogs\/public\/n4businessmanagement\/uploads\/sites\/10340\/2023\/03\/02111532\/Screenshot-2023-03-02-111502-292x300.png 292w\" sizes=\"auto, (max-width: 439px) 100vw, 439px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h3>Owners Savings<\/h3>\n<p>An amount of money is borrowed from the bank, then repaid (with interest) over a set period of time<\/p>\n<p><strong>Advantage<\/strong><\/p>\n<ul>\n<li>No need to pay interest on the money<\/li>\n<\/ul>\n<p><strong>Disadvantage<\/strong><\/p>\n<ul>\n<li>Risk of losing investment if the business fails<\/li>\n<li>Owner may not have enough funds to meet the needs of the business<\/li>\n<\/ul>\n<hr \/>\n<h3>Bank Loan<\/h3>\n<p>Money put into the business by the owner<\/p>\n<p><strong>Advantage<\/strong><\/p>\n<ul>\n<li>Can be paid back over a period of time<\/li>\n<\/ul>\n<p><strong>Disadvantage<\/strong><\/p>\n<ul>\n<li>Paid back with interest<\/li>\n<\/ul>\n<hr \/>\n<h3>Mortgage<\/h3>\n<p>Long term loan provided by a bank in order to buy property (only method to buy property other than cash)<\/p>\n<p><strong>Advantage<\/strong><\/p>\n<ul>\n<li>Structured repayments over a long term (25 years)<\/li>\n<\/ul>\n<p><strong>Disadvantage<\/strong><\/p>\n<ul>\n<li>Paid back with interest<\/li>\n<\/ul>\n<hr \/>\n<h3>Government Grant<\/h3>\n<p>Money given to the business by the government. Used to help finance new projects \u2013 especially those that create new jobs<\/p>\n<p><strong>Advantage<\/strong><\/p>\n<ul>\n<li>No Need to pay back the grant<\/li>\n<\/ul>\n<p><strong>Disadvantage<\/strong><\/p>\n<ul>\n<li>Can be difficult to obtain as you need to meet certain criteria to qualify for the grant<\/li>\n<\/ul>\n<hr \/>\n<h3>Trade Credit<\/h3>\n<p>Items are bought from suppliers on a \u2018buy now pay later\u2019 basis<\/p>\n<p><strong>Advantage<\/strong><\/p>\n<ul>\n<li>Gives the business more cash to use in the immediate future<\/li>\n<\/ul>\n<p><strong>Disadvantage<\/strong><\/p>\n<ul>\n<li>Can only be used to buy certain goods and bills usually have to be settled within 30,60 or 90 days<\/li>\n<\/ul>\n<hr \/>\n<h3>Hire Purchase<\/h3>\n<p>An item is bought on credit \u2013 repayments paid each month until the final payment and only then does the item belong to that person\/org<\/p>\n<p><strong>Advantage<\/strong><\/p>\n<ul>\n<li>Cost of purchasing expensive item is spread over a long period of time<\/li>\n<\/ul>\n<p><strong>Disadvantage<\/strong><\/p>\n<ul>\n<li>High interest rates charged<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Businesses need money to be able to pay bills, employees, buy machinery, equipment and raw materials.\u00a0 This money may eventually come from sales made, but in the beginning businesses may have to rely on different sources of finance. Different types of businesses can raise different sources of finance, though some are accessible to all types [&hellip;]<\/p>\n","protected":false},"author":79984,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-173","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n4businessmanagement\/wp-json\/wp\/v2\/pages\/173","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n4businessmanagement\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n4businessmanagement\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n4businessmanagement\/wp-json\/wp\/v2\/users\/79984"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n4businessmanagement\/wp-json\/wp\/v2\/comments?post=173"}],"version-history":[{"count":4,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n4businessmanagement\/wp-json\/wp\/v2\/pages\/173\/revisions"}],"predecessor-version":[{"id":179,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n4businessmanagement\/wp-json\/wp\/v2\/pages\/173\/revisions\/179"}],"wp:attachment":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n4businessmanagement\/wp-json\/wp\/v2\/media?parent=173"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}