Page 24 - BUSINESS STUDIES FORM 5

Student's Book Form Five

Sources of financing for medium-sized businesses
Guide the students in pairs to describe the sources of financing
medium-sized businesses by focusing on both internal and external
sources.
FOR ONLINE READING ONLY
Learning resources
Business newspapers on sources of financing businesses, Commerce
for Ordinary Secondary Schools Form III, and Business Studies for
Advanced Secondary Schools Form V textbooks, and online or offline
related resources.

Possible answers for Exercise 3.2
1. Some of the reasons for Kichochi seeking finance to set up
his new medium-sized business are covering the costs of the
start-up business, advertisement, buying materials, and paying
workers.
2. Some of the sources of finance that may be used to expand the
selling and distributing second-hand motor vehicles business
outside Dar es Salaam region are retained earnings, and grants.
The reason for using these sources of finance is they are debt-
free sources of finance.

3. The benefits to TIE’s catering management using business
profits as a source of finance to increase capital rather than
selling some of the assets are as follows:
(a) Easy to access capital compared to the sale of assets
which requires finding a purchaser of the assets.
(b) The business will increase the capital as well as retain
ownership of the assets.

Activity 3.2

This activity aims to identify different financial institutions
providing loans and the conditions they provide to medium-sized
businesses.

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