Sources of finance

Sources of finance include retained earnings, released working capital, asset disposals, new equity, borrowing and lease arrangements. These can be classified by origin, maturity and whether they create ownership or creditor claims; the classifications are distinct. Evaluate cost, availability, control, repayment timing, covenants and risk in relation to the purpose and cash flows being financed. A source that appears inexpensive may create liquidity pressure or dilute ownership, and a suitable mix depends on the organisation's circumstances.