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ASSIGNMENT COVER SHEET Course Name: | Edexcel BTEC Level 5 HND Business and Management | Assignment Name: | Managing Financial Resources and Decisions |

Section 1: Understanding the Source of Finance Available to Business
IDENTIFY THE SOURCES OF FINANCE AVAILABLE TO BUSINESS
In order to set up a business the owner or business needs money to get it going, and in cases of established businesses, keep it growing. Business owners will usually use some of their own money coupled with other sources of finance to start their business. There are several ways to acquire financing and a few of them are personal capital and borrowing from friends, borrowing from a bank, factoring, invoice discounting, leasing, hire purchase and franchising. For larger companies they have the advantage of being able to sell shares to raise capital, they can also have large investors, and being able to ‘raise capital’, they can also retain earnings in order to use the money as cash flow for further developments in the company or for a particular project (this money belongs to shareholders). Companies who are already established can retain their profits for a period of time and use this money in the future for projects or business needs, this is usually shareholder dividend and ultimately belongs to the shareholders, but the company is using it to expand or better the business. The selling of company assets is also seen as a way of raising capital, however if you are selling off your assets how does this help your business, you will lose the equipment that is helping you to make money.
(Access Credit Management 2015) Company’s use invoice discounting and factoring for selling their invoices to another company, (usually a bank) and getting cash in return, these invoices are bought for between 80% and 85% of the total invoice and the rest is paid once the debt has been paid

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