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Business organizations are able to raise finance from a wide range of sources. The sources of financing can be classified into internal and external; short term, medium and long term sources of financing. (a) why might a new business find it difficult to raise external finance? (b) explain trade credit and why is it a source of finance? (c) state two drawbacks to long term loan finance (d) why might a firm decide to lease new equipment rather than to purchase it outright? (e) why might the owner of a private limited company be reluctant to apply for public limited company status for the business, despite the prospect of additional finance?
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