The purpose of this report is to present different sources of finances to a business and the different implications of various finances in a business. It is divided into 6 parts. The first part will identify the sources of finance currently available to a business. The second part will assess the implications of the different source. The third part will evaluate appropriate sources of finance and analyze the costs of different sources of finance for the new solar power business project. The fourth parts will analyses the costs of different sources of finance for the new solar power business project. The fifth parts will explain the importance of financial planning. The sixth ...view middle of the document...
For the new company, the funds are in great demand. Fully utilize and save every penny as the future liquidity is a very important aspect. Through the lease, the company can save a lot of expenses.
Large companies are usually listed longer time companies in the industry have a certain reputation and credit. A large company to borrow from banks to borrow from banks is now big business financing is a very common debt financing modalities. From financing bank borrowings are speed, low cost of capital, borrowing flexibility.
Small company risk resistance is financing difficulties. The company can apply for government funds to support and financial subsidies, to raise funds. Financial subsidies given by the Government to give full play to the role of small businesses in certain aspects of the national economy and social financial assistance. Fiscal subsidy application link is to encourage small businesses to absorb employment, promote scientific and technological progress and encourage small businesses to export small business and so on.
They all have the same characteristics, stability and ability to withstand risks. They can borrow funds from a partner or friends or to borrow to raise cash. Through these way to raise funds operating companies.
2. Assesses the implications of the different source.
The following are the advantages and disadvantages of funding sources.
| | |Advantages and practicability |Disadvantages |
|Equity |Ordinary shares |Permanent ordinary shares in the raising of capital, no |Ordinary shares of the high capital cost of |
| | |time limit, do not need to be returned. This is to ensure |ordinary shares in issue costs are generally |
| | |that the minimum capital needs and to maintain long-term |higher than other securities. The new ordinary |
| | |stable development of useful. Ordinary shares in issue do |shares will increase shareholders, which may |
| | |not have a fixed dividend burden; ordinary shares higher |distract the control of the company. The new |
| | |expected return, to some extent offset the effects of |shareholders share the company did not issue new|
| | |inflation. The financing of ordinary shares is easy to |shares before the rest of the accumulated |
| | |absorb funds. |earnings, will reduce the net income per share |
| | | |of ordinary shares, which may lead to stock |
| | | ...