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You are here: Home > Educators > Level 2 Business and Economics Education > Sources of Finance for Business > Overview of sources of finance |
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Overview of sources of financeWhen looking at this area, there are a number of things you need to think about. First of all, you need to consider why the business needs to raise finance. Finance can be needed for a variety of different reasons, which will have an effect on what the most appropriate sources of finance will be. Finance could be needed for:
The type of finance needed to deal with these problems is going to be different - it is unlikely, for example, that Liverpool FC would use a bank overdraft or a credit card as a source of finance to pay for their new stadium! We tend to break up the sources of finance into two parts - short term finance and long term finance. You might also see reference to medium term finance. There might be some types of finance that do not sit neatly into either short term or long term so medium term might apply! Short term FinanceThis refers to money that is needed to finance activities that are usually going to last less than one year. Such finance is generally used to manage the day to day operations of a business. Long term FinanceThis refers to finance that is needed over a long period of time - certainly over a year and possibly over many years. It tends to be used for financing the setting up of businesses and for expansion of existing businesses. Drag and DropDrag the sources of finance below into the appropriate box. If you think that an overdraft is a source of short term finance, for example, drag it into the 'Short Term Finance' box. When you have completed them all, select the 'Mark' button to see your score. If you have got some of them wrong, you will not be told which ones are wrong so you will have to think carefully! Keep dragging and dropping until you have them all correct. Please note: to make full use of the activity, your system must have Macromedia Flash Player 6 (or higher) installed - this can be obtained from the Macromedia Web site. Interactive Macromedia Flash resources developed by Biz/ed are designed to work both with and without the use of a mouse and be compatible with as many assistive technologies as possible (further information on our accessibility features is available). If you cannot view the interactive resources for whatever reason a static annotated image will appear instead, if you cannot view the static image it will be replaced by descriptive text. To perform the drag and drop exercise using the keyboard tab to the list of items. Use l and r to move the items to the left and right containers respectively and tab to move to the next item. To mark the exercise press the return key and to reset the resource use the delete key. |
