IGCSE Business Studies Ch 5.1 | Business Finance: Needs and Sources | Sources of Finance Explained

📌 In this lesson, we explore Sources of Finance (Ch 22) — one of the most important topics in IGCSE Business Studies. You’ll learn why businesses need finance, how start-up, expansion, and working capital are funded, and the difference between capital and revenue expenditure. The video explains internal vs external sources of finance, including retained profits, owner’s savings, loans, shares, debentures, leasing, overdrafts, and more. We’ll also cover short-term vs long-term finance and how businesses decide which option is best depending on risk, gearing, and control. By the end, you’ll clearly understand how firms raise money and choose the most suitable source for their needs.


Timestamps

0:00 – Intro
0:09 – Why Businesses Need Finance
0:31 – Start-up Capital
1:04 – Expansion (Capital for Growth)
1:35 – Additional Working Capital
2:19 – Capital Expenditure vs Revenue Expenditure
2:58 – Sources of Finance
3:21 – Retained Profits (Internal Finance)
4:08 – Sale of Exiciting Assets (Internal Finance)
4:42 – Sale of Inventories to Reduce Inventory Levels (Internal Finance)
5:12 – Owner's Savings (Internal Finance)
5:39 – Issue of Shares (External Shares)
6:12 – Bank Loans (External Shares)
6:51 – Debentures (External Shares)
7:26 – Factoring of Debts (External Shares)
8:04 – Grants and Subsidies (External Shares)
8:35 – Microfinance (External Shares)
9:04 – Crowdfunding (External Shares)
9:46 – Short-term vs Long-term Finance
10:10 – Overdrafts (Short-term Finance)
10:51 – Trade Credit (Short-term Finance)
11:21 – Factoring of Debts (Short-term Finance)
11:43 – Bank Loans (Long-term Finance)
12:10 – Hire Purchase (Long-term Finance)
12:43 – Leasing (Long-term Finance)
13:16 – Issue of Shares (Long-term Finance)
13:43 – Debentures (Long-term Finance)
14:01 – Choosing a Source of Finance
14:19 – Purpose and Time Period
14:53 – Amount Needed
15:22 – Legal Form and Size
15:55 – Control
16:20 – Risk and Gearing
16:56 – Final Engaging Question & Conclusion



📚 What you’ll learn in this video:

✅ Why businesses need finance (start-up, expansion, working capital)
✅ Internal finance: retained profits, sale of assets, owner’s savings
✅ External finance: loans, shares, debentures, factoring, subsidies, crowdfunding
✅ Short-term vs long-term finance explained
✅ Choosing the right source of finance (purpose, amount, legal form, control, risk and gearing)

📚 Perfect for Cambridge & Edexcel IGCSE Business Studies revision, exam preparation, and classroom learning.

Watch next: Ch 5.2 – Cash Flow Forecasting and Working Capital ➡️    • IGCSE Business Studies Ch 5.2 | Cash Flow ...  

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