1. BTEC NATIONAL AWARD IN BUSINESS
UNIT 2
SOURCES OF FINANCE
BTEC National Award - Unit 2

2. BTEC National Award - Unit 2
Sources of Finance
There are two main ways that business can access financial resources
Internal
From within the business
External
From outside the business
BTEC National Award - Unit 2

3. Internal Resources - savings
The owner of the business often has to use their own personal savings to start a business.
This is because banks are not always willing to take a risk and invest in them.
Savings are a good source of finance as interest is does not need to be paid.
The owner remains in control of the business
BTEC National Award - Unit 2

4. Internal Sources - Profits
After a business is operating it may be able to use the money that it makes as profits
By investing the profits back into the business it may lead to greater potential profits.
The amount of profit the owners want to retain in the business will depend on the amount they want to keep for themselves
For some businesses it is not possible to use capital from profits, for example if they are a charity or not for profit organisation
BTEC National Award - Unit 2

5. BTEC National Award - Unit 2
External sources
BTEC National Award - Unit 2