Sources of Finance for Bubbly-Bakery.com

This article discusses the different sources of finance for Bubbly-Bakery.com, including bank loans and venture capital financing. It explores the advantages and disadvantages of each source and provides insights on personal capital and loans from friends and family for organizing events.

PLANNING FOR
GROWTH

Table of Contents
Table of Contents.............................................................................................................................2
TASK 1(a)........................................................................................................................................3
TASK 1 (b)......................................................................................................................................3
REFERENCES................................................................................................................................5

TASK 1(a)
There are number of sources from which the company can gather the finance or the
money. The money is required for the operations of the company and without money the
business cannot run and operate in successful manner (Vinczeova and Kascakova, 2017). That is
why it is essential for Bubbly- Bakery.com to evaluate all the sources of finance and then take
money from it. The various sources of finance are as follows-
Bank loan- this is the easiest and safest way of taking the finance for the running of the
business. This is majorly because of the reason that when the company requires loan then at that
time they can go to the bank and then the ask bank for the loan. In return the bank will provide
for loan but will charge an interest over the loan amount.
Advantages
 The major benefit of using the bank loan as a source of finance is that there is flexibility in
the bank loan that is when the loan is provided the bank will not order the bakery that how to
use the finance.
Disadvantages
 The major drawback of this source is that in against of the loan taken the bakery has to keep
some or the other thing as collateral.
Venture capitalist- this is source of finance wherein the venture capitalist invest their
surplus money in the other company and this is referred to as the venture capital financing.
Advantages
 The major advantage of using venture capital is that the bakery can get expert business
advice from the venture capitalist as they are professional business handlers.
Disadvantages
 The major drawback of this type of finance is that the venture capitalist gets the minor
ownership and control within the business and this losses control of the owner of the
business as they have to listen to the venture capitalist (Singh and Wasdani, 2016).
TASK 1 (b)
For the arrangement of the afternoon teas in an event for local dignitaries by Bubbly-
Bakery.Com is as follows-

 Personal capital- this is the most important source of finance which the bakery can use in
organizing of the event. This is majorly because of the reason that when the own money will
be used by the bakery then they will not be indulging in any of the liability with the outside
party. The major reason for the selection of this source of finance is that this will not have
any cost of arranging the money and no interest will be paid (Radović 2016).
 Loan from friends and family- this is also another type of source of finance which can be
used by bakery in order to organize the event for the local dignitaries. This is basically
because of the reason that when the person will take loan from their relatives then the
interest will be low in comparison with the banks and other sources of finance. In addition to
this if the loan repayment will be little late then the person will not charge any extra interest
and this will save the cost of the bakery.

REFERENCES
Books and Journals
Vinczeova, M. and Kascakova, A., 2017. How do Slovak small and medium-sized enterprises
make decision on sources of finance. Ekonomicko-manazerske spectrum. 11(2). pp.111-
121.
Singh, C. and Wasdani, P., 2016. Finance for micro, small, and medium-sized enterprises in
India: Sources and challenges.
Radović, G., 2016. Sources of finance for rural tourism in the Republic of Serbia. Economics of
agriculture. 63(3). pp.1053-1065.