Business bank

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Finance - Sources of finance

Questions - Case study - Biz Training

This section is based on the case study introduced in the Investment section. Let us remind ourselves of the situation.

Scenario 1:

Biz Training Ltd. is considering buying a new online learning system to enable them to deliver the training they do for their corporate clients. They are looking at three different systems and the cost of each system is as follows:

Scenario 2:

Biz Training is contemplating relocating to new premises. Two possible sites are available with slightly different features and aspects. The re-location will help them to be able to meet clients' needs more effectively.

Location A:
Investment required for the move = £10 million

Location B:
Investment required for the move = £8 million

Biz Training is a private limited company formed ten years ago by a group of five ex-lecturers. The five are the main shareholders but there is also a shareholder who was a local businessperson who initially approached two of the five to run a training course for her company.

In each scenario, evaluate the sources of finance that might be available to Biz Training to carry out the projects outlined. (20 Marks)

In doing this you need to be thinking of what types of finance may be available and what the appropriateness of the finance available might be. Some of the marks available are going to be for knowledge - i.e. for you recognising the range of finance sources available, some will be for application - how well you link the knowledge of sources of finance to the actual scenario and case study given; some will be for analysis - being able to break down the issues into key features and to identify the impact of these points and the remainder will be for making a judgement about what, in the light of your analysis, would be an appropriate source of finance in each case from the variety you have looked at and why this is the most appropriate.

Remember, that there is no right answer to this type of question. You will need to try to present a balanced account of the sources of finance and how appropriate they are to this type of company.