Business Studies (AS)·Finance in the private/public sector · NSSCAS 2.2
Sources of finance: choosing and justifying
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You already met a few sources of finance in NSSCO. In this AS lesson you will learn to analyse exactly why a business needs funds, weigh the four criteria of purpose, amount, time and risk, and use the matching principle to CHOOSE and JUSTIFY the right short, medium or long-term source. That evaluation skill is what the AS exam rewards, so we will practise it on a real Namibian bakery.
What you'll learn in this lesson
By the end you should be able to (NSSCAS Business Studies (AS) 2.2):
- analyse a firm's need for funds for specific purposes
- identify and explain the main criteria which business will use when seeking short, medium and long-term finance (purpose, amount, time, risk)
- evaluate the choice of finance in a given context - short term (bank overdraft, trade credit, factoring of debts); medium term (hire purchase, leasing, bank loan); long term (bank loan/mortgage bond or long-term loan, issuing of shares)
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