Starter task
What do you think are the most
popular sources of finance for
entrepreneurs starting up a
business?
Beauchamps High School
Answers:
 Personal savings - 60%
 Business loan from a bank - 10%
 Personal credit cards – 10%
 Personal assets (other than savings) – 7%
 Personal home equity loan – 5%]
 Loan from family and friends – 2%
 Business loan from the government – 0.7%
 Government guaranteed bank loan – 0.7%
 Grant – 0.4%
Beauchamps High School
GCSE
Business Studies
Obtaining Finance
Beauchamps High School
by the end of this lesson students….
Evaluation ~ GCSE
Grade A*
• Will be able to evaluate sources of
finance dependant of business needs
Synthesis~ GCSE
• Will be able to propose sources of
finance for a business
Analysis ~ GCSE
• Will be able to analyse the suitability of
the source of finance
Application ~ GCSE
• Will be able to demonstrate
understanding by using examples/cases
Grade A
Grade B
Grade C
Comprehension ~
• Will be able to explain the different
sources of finance available
Knowledge ~ GCSE
• Will be able to recall the different
sources of finance available
GCSE Grade D
Grade E
Obtaining Finance
Beauchamps High School
Which sources of finance would be available to a
business just setting up?
Source of
Finance
Which of these would need to be paid back in the short term
(less than one year) and which would be longer term?
Beauchamps High School
Sources of Finance advice

Beauchamps High School
www.bbc.co.uk/schools/gcsebitesize/business/finance/sourcesof
financevid.shtml
Short Term Finance
Sources of money for
businesses that may
have to be repaid
within a year
Beauchamps High School
Short Term Finance
Bank Overdraft– borrowing money from a bank
by drawing more money than in account (interest is
charged)
Trade Credit– suppliers give a period of time
before they have to be paid (typically 30 days)
Factoring– business receives cash immediately
for the invoices is has issued from a factor, e.g. a
bank, rather than waiting 30 days
Beauchamps High School
Long Term Finance
Sources of money for
businesses that are
borrowed or
invested typically for
more than a year
Beauchamps High School
Long Term Finance
Share Capital – monetary value of a
company which belongs to shareholders
Venture Capitalist – professional investors
who are willing to put money into a new company
Loans– borrowing a sum of money which has
to be repaid with interest (1-5 years)
Beauchamps High School
Long Term Finance
Retained Profit – profit which is kept back
in the business and is reinvested
Leasing – renting equipment or premises
Grants – sum of money from the government
which doesn’t have to be repaid
Beauchamps High School
Against
the Clock
Now Feedback to class
Task
Beauchamps High School
Task
Beauchamps High School

Read the following scenarios and complete the table on the most
suitable source(s) of finance for each scenario. For many, there is
more than one source of finance available so be prepared to justify
your answer.


Scenario 1: New Property
Mark Jennings is a plumber who has been working from home for the
last 2 years. He would like to buy a property with plenty storage and
office space.


Scenario 2: New Computer Network
Hinton Ltd specialises in producing designer t-shirts and has decided to
up grade the current computer network within her offices in Manchester.
She estimates that the cost of a new computer network will be £30 000
and would like to upgrade this system every 3 years.


Scenario 3: Starting up a new Fruit and Vegetable shop
Mike Randall has just been made redundant from a major high retailer.
He has received a redundancy payment of £50 000 and would like to set
up an organic fruit and vegetable shop in Didsbury.
Can you…..
Recall the different sources of finance available
Explain the different sources of finance available
Demonstrate understanding by using examples/cases
Analyse the suitability of the source of finance
Propose sources of finance for a business
Evaluate sources of finance dependant
of business needs
by the end of this lesson students….
Evaluation ~ GCSE
Grade A*
• Will be able to evaluate sources of
finance dependant of business needs
Synthesis~ GCSE
• Will be able to propose sources of
finance for a business
Analysis ~ GCSE
• Will be able to analyse the suitability of
the source of finance
Application ~ GCSE
• Will be able to demonstrate
understanding by using examples/cases
Grade A
Grade B
Grade C
Comprehension ~
• Will be able to explain the different
sources of finance available
Knowledge ~ GCSE
• Will be able to recall the different
sources of finance available
GCSE Grade D
Grade E