Page 165 - 5.2 i. Manac Finance ITC Summarised Notes

THE FINANCING DECISION

Introduction

• Finance represents the lifeblood that enables a

business to expand, grow, thrive, and sometimes,
merely survive. Raising finance is therefore a very

important aspect for any business enterprise. In

deciding on a form of finance, an enterprise should
consider several factors, including the following:

• suitability to the type of business and/or asset financed

• true cost

• impact on cash flow

• constraints associated with the form of finance, including the
effect of debt covenants

• impact on the overall risk profile

• how it pairs with existing finance

• availability

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