3.1+-+Sources+of+Finance


 * Sources of finance**

Businesses need finance at 3 key points during their life:
 * 1) to start up
 * 2) to run
 * 3) to expand

There are a huge variety of sources available and this unit explores the most common short, medium and long term sources, as well as whether they are internal or external.

1 - Download and complete the document below, with a partner:

2 - working in groups, you must now complete (one each) of the following document. You will work from the top down or the bottom up, depending on Mr. S's instructions! We will then share our learning and be teaching the other group, who will complete their sheet with your support.



Here is the resource you should have reviewed prior to today (emailed two weeks ago)

Today's resource:

Exam question to answer and complete for next lesson:



Practise Exam Question: 10 minutes - exam conditions
Pan Bam Ltd is a medium-sized bread-making firm. It has a manufacturing plant in the outskirts of the capital, and from there it distributes to all the supermarkets within a 400 mile radius (640 km). The distribution is in the hands of an independent transport firm. Currently Pan Bam is undergoing changes and its Board of Directors is considering different investment proposals.

The three proposals are:
1. To buy 5 trucks (lorries) and therefore become independent of the distributing firm. 2. To open up a second branch in the second most important city of the country, located 1000km away from the capital and where people speak a different dialect. 3. To buy a new machine to make different (yet bread related) products.

The proposals are to be financed in the following manner:
1. leasing the vehicles; 2. issuing more shares; 3. a medium-term loan from a bank. (Total 6 marks)
 * Task.** Assess the advantages and disadvantages of financing each proposal in the manner described above.

We will review your responses as a group.