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Business Financing

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For example, (Simple Pound, 2007) reports that The Bank of England has a 5.5% interest rate.   This is quite low considering credit cards charge up to three times that figure.   The chart below shows the highs and lows in an interest rate at The Bank of England over the years. For example, (Simple Pound, 2007) reports that The Bank of England has a 5.5% interest rate.   This is quite low considering credit cards charge up to three times that figure.   The chart below shows the highs and lows in an interest rate at The Bank of England over the years. Bank financing can be a short term or long term solution to financing a business.   Bank loans can range from months to decades, depending on the business and financing.

Another form of business finance is through investments.   These investments can be through the stock markets, personal financiers, or company retirement plans.   Investments can be used in various ways to finance a business (Loeb, 2007, 10).   An international corporation, such as Microsoft, can sell stocks to generate financing for their business.   Big companies can also offer stock options as a retirement plan.   The advantage of stocks and retirement plans can be seen in Microsoft.   Microsoft stocks started low, then gradually rose.   Early employees with stock options became millionaires overnight.   For example, NASDAQ quoted the following beginning prices and today prices for Microsoft.

The disadvantage of stocks and retirement plans is large companies like Enron.     This company inflated stocks, making investors and employees bankrupt.   NASDAQ shows the difference between Enron's price shares in 2000 versus 2002.    The reason 2002 does not show up is the stock was worth American pennies.   Investments can be good if the company invested in is successful.   However, investments can be a gamble that bankrupts investors and businesses.     Investments through stocks and retirement/pensions plans can also be short or long term.   High-risk stocks can be short term investments, low-risk stocks can be long term investments.   For example, .com companies were real popular stocks, but then the market fell out causing the. com long term investors to lose out.   However, short term. com investors made good money.   High-risk companies like the. com, Enron, or newer companies not proven over time need to be short term investments.   Normally a broker or bank can advise.   Long term investments are in companies that have stood the test of time, like Coca Cola, Siemens AG, Sainsbury Ltd. , and other companies that have survived more than a few years.    

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