Funding Base

Cash flow for day to day costs. Leasing or hire purchase. Otner sources of finance. What is a large business. Other sources of long term loans. One such source is venture capital. Short term sources of finance. Hire purchase and leasing.

But it's hard to decide the business is large or small if we use the number of employees as the only criterion. Using other criteria at the same time would give us a completely different picture.

Start up. New firms are often small and have small number of owners. This means that their finance is limited and they will need to seek aditional finance to cover their start-up costs. They will need money for premises, machinery, raw materials and so on.

Cash flow for day-to-day costs. Additional finance may be needed to cover those periods where the firm doesn't have enough money. Money is needed not only for day-to-day costs, but also for raw materials and wages. And the timing of payments for goods and services doesn't always match the outgoing payments.

If small businesess want to avoid having to borrow a lump sum, businesess can use leasing or hire purchase arrangements.

Many small businesses rely on borrowing from banks, but there are other sources of financial support. The most important alternative is the government. They might get:

Large business companies are usually limited companies or public limited companies.

Each owner of the company puts an amount of capital into the company which is divided into shares OF fixed amounts.