Sources of Finance

Every business needs money — to start up, to run day-to-day operations, and to grow. This lesson covers the main sources of finance available to businesses, classified by whether they are short-term or long-term, and internal or external.

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Internal vs External Sources of Finance

Type	Definition	Examples
Internal	Finance generated from within the business itself	Retained profit, sale of assets, personal savings
External	Finance obtained from sources outside the business	Bank loans, overdrafts, share capital, venture capital

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Short-Term Sources of Finance

Short-term finance is used for day-to-day expenses and cash flow management (typically needed for less than 12 months).