Sources of Finance

Leasing
Renting of vehicles or equipment
More expensive in the long term than buying the asset
Asset is replaced when obsolete
Spread payments

Share issue
Dividends have to be paid to shareholders
Loss of control possible
Can generate large amounts of money/capital

Debentures
A long term loan to plcs
Debenture holders receive fixed interest
Debenture holders receive the money lent back

Venture Capital (think Dragons' Den)
Venture capitalists lend money when banks think it is too risky
Large amounts lent but interest is high
Part ownership often needed in exchange for finance

Hire purchase
A deposit is required and the rest of the price is paid in instalments
Ownership remains with the finance company until the last instalment
is made

Mortgage
A large sum of money borrowed from a bank or building society to
purchase property
Monthly repayments required (interest)
Long term borrowing eg 25 years

Grants
Some of the money paid by eg Local Authority or Government
No need to repay a grant
May be given if organisation is creating jobs in an area of high
unemployment etc

Sale of asset (Divestment)
Equipment or property which is no longer required is sold off to raise
cash

Retained profits
Profits made are not distributed to the owners but kept back for
reinvestment