Assignment Number 1
According to Teachers Network Editors (2012), all business need both short term and long term finance. Short term finance are needed for the very first step of the business, for starting up the business and to cover the daily running cost, while the long term finance will help them to grow, to expand and to buy resources. In addition with this classification, the sources of finance are divided into internal and external finance.
By internal sources we understand the finance that came from business assets or activities while external sources come from outside the business. This report`s aim is to identify the sources of finance available for Mathias Coffee Shop, analyse the cost of those sources of finance and discuss about the implication of those sources identifies.
LO 1.1 Identify the sources of finance available to the business
Mathias Coffee Shop is a local coffee shop located in the heart of Wembley. This coffee shop is ideal for escaping the daily stress of the life, enjoying friend`s company, read a good book while drinking a good coffee. The owners of this shop have secured this location with a three- year lease with an option for extending. They also have provided £140000 from the starting up cost of £170000. For the rest of the capital needed for starting up this business they borrowed money as loans from the HSBC bank, commercial loans. Those loans were split into short term loans, 1 year short term loan 10000 and long term loans, five years, 20000. Nate H (2009).
Looking at those figures we can mention that according to Journal of Small Business and Enterprise Development (2003), small firms have a limited access to external financ...
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...x of funding products and it should make sure it will afford the funding certainty. Paul Barrow (2004).
Teachers Network Editors (2012).Sources of finance. Available: http://teachersnetwork.org/teachnet-lab/london/dsalbstein/sources/external.htm. Last accessed: 24/10/2013.
Nate H.(2009),Coffee Shop Business Plan, Java Culture. Available: http://www.bplans.com/coffee_shop_business_plan/executive_summary_fc.php#.UoA1zVxFDVI. Last accessed: 11/11/2013.
Business finance blurtit Editors (2011). Assess the implications of different financial sources. Available: http://business-finance.blurtit.com/3588737/assess-the-implications-of-the-different-financial-sources. Last accessed: 11/11/2013.
Paul Barrow (2004), Raising Finance. A Practical Guide to Starting, Expanding and Selling your Business, Kogan Page Limited, London, p.35-38.
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