Sources of Finance for Business: Pros and Cons

Sources of Finance for Business: Pros and Cons Sources of Finance Finance is essential for a business’s, development and expansion. Finance is the core factor for most businesses and therefore it is crucial for businesses tomanage and maintain their financial resources better. Finance is available to a business from avariety of sources both internal and external. It is also crucial for businesses to choose the most appropriate source of finance for its several needs as different sources have its own benefits and costs. Sources of finance can be classified based on a number of factors and the can be classified as Internal and External, Short-term and Long-term. Identify the sources of finance available to a business Working capital   owners finding that are invested into business from the beginning to finance  operation. Liability will be created in shape of capital. Advantages Since it is an internal source offinance there are no costs involved and no repayment is needed. Disadvantages Opportunity costs are involved. Is not suitable forlong term investments. Working capital cannot raise large amounts of funds. Total risk is undertaken by the company. Using working capital as a source offinance will affect the current ratio of the business. Bank Overdraft   occurs when money is withdrawn from the bank account and the available  balance goes below zero. There are different bank charges which are  depending on the agreement. Advantages This is a good way to cover the period between money going out of and coming into a business. If used in the short-term it is usually cheaper than a bank loan. Disadvantages Interest is repayable on the amount overdrawn Can be expensive if used over a longer period of time. Mortgage this is a loan secured on property repaid in instalments over a long time around  25 years. The business will own the property once the final payment has been  made. This is a long-term source of finance. Advantages Business has the use of the property. Payments are spread over a period of time which is good for budgeting. Once all repayments are made the business will own the asset. Disadvantages This is an expensive method compared to buying with cash. If business does not keep up with repayments the property could be repossessed. Bank loan   This is a fixed amount for a fixed short time with fixed repayment. The interest  on this loan can be expensive. Advantages Set repayments are spread over a period of time which is good for budgeting. Disadvantages Can be expensive due to interest payments. Bank may require security on the loan. Hire purchase occurs when buyer is paying for things or items in fixed instalments while  using the item. Advantages Businesses can have the use of up to date equipment immediately Payments are spread over a period of time which is good for budgeting Once all repayments are made the business will own the asset. Disadvantages This is an expensive method compared to buying with cash. Trade Credit it is a system that allows buying something now and paying letter. For many  business trade credit it is essential for business to growth. Advantages Business can sell the goods first and pay for them later Good for cash flow No interest charged if money is paid within agreed time. Disadvantages Discount given for cash payment would be lost Businesses need to carefully manage their cash flow to ensure they will have money available when the debt is due to be paid. Government Grants – this organisations offer grants to businesses, both established and  new and normally there are some conditions apply. Advantages Don’t have to be repaid. Disadvantages Certain conditions may apply Not all businesses may be eligible for a grant. Factoring   is a financial transaction that occurs whereby a business sells its accounts  receivable to a third part at a discount. Advantages A large proportion of money isreceived within a short time-frame. The sales ledger of the business can be outsourced to the factor. The money collections from debtors are undertaken by the factoring company. Helps a business tohave a smooth cash flow operation. Non-recourse factoring protects the client company from bad debts. Disadvantages The business has to pay interests and fees for the factor for its services. The cost will be areduction on the company’s profit margin. Analyse the costs of different sources of finance Working capital Tangible cost: They do not have any costs as it owner money that will be invested to start a business. Opportunity costs: Could have borrowed extra if the working capital is not enough from relatives, friend. Tax effects: This can be repay when the profit will rise. Bank Overdraft Tangible cost: Interest is a little higher than forbank loans and interest is calculated on a daily basis. This is short term and quick source of finance which is not pay on time extra and large interest charges will apply. Opportunity costs: Could have borrowed from relatives or friend to avoid extra charges or to feel into debts. Tax effects: It can be deducted when the business is increasing asset. Mortgage Tangible cost: Interest rates apply as agreed in monthly instalments over a long time usually for 25 years. Opportunity costs: Could have borrowed from family to avoid the interest fees. Tax effects: The property will be possessed by the organisation if monthly payments are not meet. Bank loan Tangible cost: Interest to be paid on the sum borrowed at agreed rate. Interest is usually fixed forshort term loans, and long-term loans usually have a variable rate of interest. Interest rates are lower than for bank overdrafts. Opportunity costs: Could have borrowed cheaply from relatives or friends. Tax effects: Interest is tax deductible from profit before we arrive at profit figure for tax purpose. Hire purchase Tangible cost: The business ends up paying more than the original value of the asset for its purchase and the interest has been paid in equal instalments. Opportunity costs: Tax effects: Interest charges can be offset against profits for taxation. Trade Credit Tangible cost: If paid on time there is no financial cost involved, however if not paid on time the interest will apply automatically. Opportunity costs: Working capital and friends. Tax effects: own possession of goods can be removed by the debt organisation or sale or rent to cover the interest cost. Government Grants Tangible cost: Government grants are free and have nofinancial costs. Opportunity costs: Could have borrowed from relatives or friend as there are no legal agreements involved. Tax effects: No financial costs are involved. Factoring Tangible cost: The business must pay interests and fees for the factor for its services the interest is calculated on a dailybasis, credit management and administrative fee are also chargedand ranges. Opportunity costs: Working Capital will be a better alternative or relatives and friends. Tax effects: The business must pay interests and fees for the factor for its services and the cost will be areduction on the company’s profit margin. Evaluate appropriate sources of finance for a business project There are several sources of finance available to a business on the market. Finances are needed for many and different purposes need sources offinance which are most suitable. When choosing a most appropriate source of finance some conditions have to be considered. The conditions that need tobe considered when choosing an appropriate source of finance are: The amount of money needed The urgency of funds The cost of source of finance The risk involved The duration of finance The gearing ratio of thebusiness The control of the business Project Hair and Beauty Business Project â€Å"Inspiration† aims are to be the first beauty salon in the local area which will deliver unique and quality service by offering high standard beauty products which will quickly gain market share. â€Å"Inspiration† will provide customers with a relaxing and comforting atmosphere which will help them to enjoy the service provided to gained high reputation. Building   Mortgage long term which will be payable for 25 years. Personnel Bank Loan short time with fixed repayment 3-5 years. Furniture and stationary etc. Working Capital owners finding that are invested into business. Brochures   Overdraft short-term it is usually cheaper than a bank loan. Advertisement   Bank Loan Set repayments, spread over a period of time, interest high. Others   Relatives or friends. These loans will be paid from the cash flow from the business and will be collateralized by the assets of the company on short-term or long-term agreements with the lenders.

Evolutionary Psychology

Evolutionary psychologists view human behavior and psychological traits as a result of evolutionary adaptation in response to reproductive needs – much like the concept of natural selection applied to reproduction, or sexual selection. Drawing from this perspective, evolutionary psychologists and professionals seek to explain the differences between male and female dating and mating rituals and sexual attitudes and how they have evolved throughout the centuries.For example, researchers employ the evolutionary perspective to discuss the differences in male and female promiscuity, aggressiveness, dominance, dating patterns, and the development of sexual attitudes – differences which seem to become less apparent in modern times than the more traditional sexual values expressed throughout history. Evolutionary psychologists would propose that differences between male and female promiscuity are a result of the evolving need to ensure reproduction.While traditional female sex ual attitudes and values are evolving and females are increasingly becoming more comfortable in expressing sexual aggression or dominance in modern times, these traditional differences may be explained from the standpoint of adaptation to reproductive demands as well. Women are more limited in reproductive opportunity than men, having a limited number of eggs and a limited amount of time in which to reproduce optimally, while men have a much more unlimited reproductive opportunity with hundreds of thousands of available sperm and a many more reproductively-viable years than women.Evolutionary psychologists would propose that the differences in sexual attitudes and behaviors among men and women are directly attributable to these reproductive differences as evidenced by the innate desire of men for sexual promiscuity, as compared to the highly selective manner of reproductive behavior among women.While the evolution of social attitudes towards female sexuality has produced an acceptan ce of evolving sexual behavior among women, evolutionary professionals propose that the innate differences between men and women with regard to parenting style, romantic behavior, preferences in sexual partners, and the extent to which looks and personality play a role in mating selection, are a result of evolutionary adaptations.Evolutionary psychology would propose that male and female sexual behavior is centered on the innate need to optimize reproductive opportunity – men being visually stimulated and aggressive in order to ensure a fertile mate and reproductive opportunity, while women express nurturance and attraction towards partners who can provide, ensuring survival of the family unit. These sexual and mating differences, according to evolutionary psychology, ensure the passing on of ones’ genes.

The Power Of Yoga And Yoga Essay - 964 Words

Briana Jauregui Professor Hodge English 475 8 December 2014 The Power of Yoga Are you feeling stressed, worried, unrelaxed, looking to free your mind, or increase your flexibility? That’s where you might look into yoga. Not just yoga but the different distinct types of yoga because depending on what you want to achieve you have to take the right class. Yoga is a Hindu spiritual and an ascetic discipline to help you with specific body health. The word Yoga comes from Sanskrit an ancient indian language. And yoga meaning union. Yoga is said to be for good purpose of bringing together the mind, body, and spirit. Freeing your mind of worries and the junk that we keep trapped can prevent damaging us physically and mentally. That’s where Yoga comes to place. In order to live freely we have to free our mind to continue the journey of new life beginnings. As human beings we go through a lot, think a lot, and do a lot, but we never take the time to think about ourselves and the personal damage we are doing to our mind. Wi th the ability of doing yoga you can clear out the mental garbage and develop new ways of thinking. But it also starts off with you putting the effort to make that change in thinking differently and being more open minded. Allowing yourself to be in control of your feelings, helps you be in control of your life. The many effects of yoga can help you avoid being overwhelmed by your emotions or by another’s. Since our mind creates phobias we tend to letShow MoreRelatedTransform Your Life With Yoga And Meditation1403 Words   |  6 PagesTransform Your Life with Yoga And Meditation! MariaJohnson By MariaJohnson May 2, 2013 Yoga and meditation have been a crucial part of history. If you think yoga is about twisting and bending your body, then it s time to see it in a new light. 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Mythology Short Answers Essay - 680 Words

1). How is the word myth used popularly? For example, what does the statement, â€Å"It’s a myth† mean? In contrast, how is the word myth used in the academic context? After considering the definition in your textbooks and course materials, write a definition in your own words. The academic definition of a myth† is discovering a way of making meaning that has been part of every human society.† I believe myths are stories that are told from generation to generation. Depending on our culture, religion, beliefs and so on would determine the moral meaning behind the story. Some myths are legends. For example,† the cross of Jesus† is determined to be a legend and a myth. Depending on how the story is interpreted by the person listening to it. Myth†¦show more content†¦Religion is what people believe in, their faith, like a since of hope. In today’s society some religions have become myths so the start of newer religions may form. The very basic aspects of the world around us that myths explains are the course of day and night or seasons, the mysteries of life and death, and the creation of the world. In the African American culture we believe when a loved one has passed on we should celebrate their life. Celebrating their life means they are no longer in pain or suffering they are going home to the Almighty and we should be happy for them. Dealing with change, suffering, and loss is really about the same we pray to the man above and hope we can get through it. In our culture we rely a lot on hope. 4). How would you defend mythology’s relevance in contemporary culture? Think about familial and cultural traditions. Also, consider how mythology is used in the arts and in advertising to typify human experience. Mythology has to put forth a comprehensive compelling force on the culture, the arts and the literature of African American culture remains part of the African heritage and language. 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Is there purpose in human existence?, and many others have caused enough trouble in humanity’s short existence on the earth to cause a near identity crisis. However, all of these questions fall under the shadow of the main question that has been asked since the creation of Adam- â€Å"What exactly is the real relationship and purpose of humanity towards