There are many sources of finance that businesses can obtain their finance from.
A. Internal Sources of Finance
Internal money that belongs to the business. Sole traders and partnerships will be relying mainly on internal sources of finance such as personal funds.
Sources of Finance – Internal:
B. External Sources of Finance
External money raised from sources outside the business. Most of the external sources of finance will be appropriate for larger incorporated businesses such as Private Limited Companies (Ltd.) and Public Limited Companies (plc).
Sources of Finance – External: Short-term
Sources of Finance – External: Medium-term
Sources of Finance – External: Long-term: Debt
Sources of Finance – External: Long-term: Equity
Sources of Finance – External: Long-term: Other
All in all, businesses can fund their activities using both internal sources of finance and external sources of finance.