Internal finance
Internal sources of finance are funds found inside the business.
For example:
- profits can be kept back to finance expansion
- the business can asset salesSelling unwanted assets that the business no longer requires to generate funds. (items it owns) that are no longer really needed to free up cash
Retained profit
Retained profit is profit that has been made by the business in previous years that is then reinvested back into the company.
| Advantages | Disadvantages |
| Does not need to be repaid | For profits to build up to use in this way can take too long and good business opportunities missed |
| Advantages | Does not need to be repaid |
|---|---|
| Disadvantages | For profits to build up to use in this way can take too long and good business opportunities missed |
Sale of assets
This is when a business sells items that they no longer need for example machinery or transport. They can then use this money to re-invest into other areas of the business.
| Advantages | Disadvantages |
| Does not need to be repaid | May be difficult or may take time to sell the assets |
| Advantages | Does not need to be repaid |
|---|---|
| Disadvantages | May be difficult or may take time to sell the assets |