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Unformatted text preview: tutor2u GCSE Business Studies Starting a business getting the finance The entrepreneur will need to finance to the business. This means they will need to find money to pay for: f The purchase of plant & machinery , office equipment etc f Renting or buying premises and offices (e.g. the first 3 months rent may need to be paid in advance) f Essential business services such as insurance f The purchase of stocks of raw materials and components to allow production to start f The wages and salaries of the first employees to join the business (who may be needed before any goods or services are actually sold) f To provide financial cover whilst the business waits for customers to pay The main ways in which an entrepreneur can find finance for a new business are: f Own money f Bank loans f Bank overdraft f Money from friends f Grant assistance from government bodies These types of finance can be split into INTERNAL and EXTERNAL sources of finance. Internal sources of finance are generated from the business itself (e.g. cash from sales) and external sources of finance of finance are generated from the business itself (e....
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