Assessing Funding Sources for Capital Enhancement in Projects

This essay explores various funding sources available to firms for enhancing capital in business projects. It discusses regional development funds, which provide finance based on the region of operation, often at lower costs. Government grants, both state and central, are examined as options for national-level projects with relatively low financing costs. Bank loans are presented as a widely considered source due to their easy availability, although they typically involve higher interest rates. Equity financing, involving the issuance of shares, is also discussed, highlighting the need to provide returns to shareholders. Finally, tourism fund departments are identified as a sector-specific funding source, offering potentially negligible costs for firms operating in the TTM sector. The essay provides a comprehensive overview of external funding options available to businesses.

Sources which help to the firm for enhancing capital for any business project
Regional development fund: In each and every
country, development frameworks are always there
which provide finance as per the region. As per this, area
in which the cited firm operating and wants to adopt new
project then approaches regional development fund (Da
Gbadji, Gailly and Schwienbacher, 2015). Further, it
allows to the entities in order to develop projects within
specific area at very lower or negligible costs. Due to
this, it majorly considered by the firms to raise financial
resources.
Government grants: In order to raise fund for the national level project then government is basic
source which help to Merlin Entertainment. There are basically two kinds of the government
included which are like state and central. Government of state level provides fund for short projects
and another allows for long projects. When looking at the cost of finance then it imposes at the very
lower level on the cited company.
Bank Loan: A financing source i.e. bank loan is widely considered by majority of the companies
due to having easy and simple procedure. According to this, Merlin Entertainment Plc approaches
up to commercial banks and takes loan from them. The reason behind which most of the firms use
this source is easily availability at any area of country. However, costing impose by banks is
relatively high as compared to other explained sources. Cost of bank loan is in terms of interest rate
which fluctuates in the market.
Equity financing: Another external source of
funding in which business issues shares through
stock market which purchased by people or
shareholders. By selling shares of the firm, Merlin
Entertainment Plc generates capital which is used for
business expansion and other purposes. In exchange
to this, the management has to pay return to the
shareholders which is in form of dividend (Zkajoon,
2016).
Tourism fund department: Within every country,
fund departments are there on the basis of industry
or sector which allows relevant firms. As Merlin
Entertainment Plc operates in the TTM sector then
it approaches to the Tourism fund department
which allows to it at the lowest or negligible costs.
It is highly beneficial and appropriate source for
the firms in order to raise required financial
resources from external market.