finance, sources of

Sources from which business organizations obtain money to start up and pay for the business, and for new capital goods. The most important source of finance in the UK is internal finance, the retained profit of companies. Next in importance are bank loans and overdrafts.

Hire purchase, leasing, factoring, and mortgages are other ways in which a company can effectively borrow money.

Sometimes, companies can obtain grants from government; for example, for investing in new technology or for setting up in a high-unemployment area of the country.