Any business depends upon finance. Without finance you cannot imagine a business to run smoothly. There are different sources of finance which runs a business. These finance sources seriously affect your business. It will affect the expansion and growth of a business. The expenditure in a business also depends upon the type of finance resource. We always want that our business flourish positively but due to some factors it may turn negative. ance Assignment writing help to the students explains this concept very easily. This topic is important and popular in Finance assignment writing help.

Types of Financial Resources for Any business

Financial resources may be broadly classified into two types: Internal and External.

  • Internal Finance: The internal financing is from two sources. First, it is from the owner of the business as capital. Second, it may be the earnings retained by the owner.
  • External Finance: The external financing is also from two sources. It may be Debt or Equity. The debt may be taken from a bank or any financial institution. The equity may be raised by public issues, shares, debentures and from unknown sources. The business or organization may get loans from some government agency.

How Finance Resources Affect Your Business?

There are many finance factors which affect your business. The effect may be advantageous or disadvantageous.

Advantageous effects: Trade credit helps your business in a healthy way. Let’s say you take the money and manufacture goods. Then you sell the goods and obtain money and pay the credit. There is healthy relation between you and the creditors if you pay them on time. If you sell a property with appreciated price it will help you positively to have funds in odd times. Issuing shares benefit both the company as well as the investors. Company raises capital for business and the investors enjoy interest on the investment. If your product enjoys good credibility, you can attract capital in its name.

Disadvantageous effects: If the business has bad credit paying history it is very difficult to raise capital from the creditors. On the other hand, if you take an asset as a finance source but its value has been depreciated it will no longer be a capita raiser. If you are involved in hire purchase for purchasing a product, the product will not be owned by you until you have paid the last instalment. If you have issued shares, the profit will be shared by the shareholders and no independent decision can be taken by the company.

To conclude, we can say that the finance sources have serious implications on the business. Depending upon the conditions and situation, these sources can affect the business positively or negatively. So, you have to choose wisely.

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