INTRODUCTION

As we are aware, finance is the lifeblood of business or it can be said as the most important part of all the business enterprises. To understand finance, you need to know the entire business indeed. Finance can be used for various reasons like expanding the business, investing and purchasing fixed assets like land and building, machinery so on. In order to survive in this competitive world every organisation need to have a good strength of finance available to their business or else they won't be able to survive in this world. Hence, it is very important to select the correct sources of finance available to the company. Finance can be in two types' external sources or internal sources.

TASK ONE
1. SOURCES OF FINANCE AVAILABLE TO A BUSINESS

Finance can be arranged from internal sources or external sources. External sources of finance are funds that come from outside the business. Here the business are getting loans from individuals or institutions that do have business relations directly e.g. banks.

1.1 Internal sources
The main internal sources of finance for a start-up are as follows:

Personal sources

These are the most important sources of finance for a start-up, and we deal with them in more detail in a later section.
As mentioned earlier, most start-ups make use of the personal financial arrangements of the founder. This can be personal savings or other cash balances that have been accumulated. It can be personal debt facilities which are made available to the business. It can also simply be the found working for nothing! The following notes explain these in a little more detail.

* Savings and other “nest-eggs”

An entrepreneur will often invest personal cash balances into a start-up. This is a cheap form of finance and it is readily available. Often the decision to start a business is prompted by a change in the