1. MEDIUM TERM SOURCES OF FINANCE

2. BANK LOAN ADVANTAGES Can borrow large sums of money
Can pay back in instalments
Instalments are fixed – makes budgeting easier
DISADVANTAGES
Can be charge high rates of interest
Difficult for smaller firms to obtain a loan due to high risk

3. LEASING
ADVANTAGES
Renting means you don’t need to pay out large sums of money at one time.
Can change rented equipment when out of date.
DISADVANTAGES
Do not own the equipment out right.
In the long term can be very expensive.

4. HIRE PURCHASE ADVANTAGES Spreads the cost of a large purchase
Equipment is owned by the firm at the end of the hire purchase period
DISADVANTAGES
Expensive form of borrowing – interest is charged
Goods are owned by the finance company until last instalment paid.