Unite 2 Investigating Business Resources - Assignment 1

Unite 2 investigating Business Resources

Assignment 1 – Task 1

A plumber (sole trader)

Internal Sources

Owner's saving: if the owner has already saved some money, he could use it to invest in his business.

Capital from profit: he could also use some money out of his profit which he has made in previous year.

Sale of assets: if the owner has a spear machine or equipment he could sell them to raise some money for his business.

External Sources

Bank: money could be borrowed from banks in the form of overdrafts, mortgages and loans.

Overdraft is a form of loan where the plumber is allowed to use more money then he have deposited in the banks. Overdrafts should be paid back as soon as possible otherwise the bank will charge you a high rate of interest on that money.

A plumber could apply for mortgage from different organisations. The money should be pied back in monthly instalment. It depend on the plumber if he has signed a fixed mortgage then he have to pay the fixed amount of money each month but if he had signed a variable mortgage then it will depend on the country economy. It is very long term loan.

Bank loans are available for banks and financial organisations to cover debts and could be used as an investment on business. Could be paid monthly or all in one.

Building societies: if the business is overdraft or needed a commercial mortgage or short term loans then the business can apply from the building societies such as Nationwide Building Societies.

Leasing: another useful source of finance is leasing which as a form of renting. If the plumber hasn't got enough money to buy some equipment, then he can buy it in the form of leas. Pay the money in monthly instalment.

Family or friends: money could be also borrowed from friends