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Understand why businesses require finance, including reasons such as initial funding, expansion capital, and extra working capital. Recognize the distinction between short-term and long-term financial needs.

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Cambridge IGCSE Business StudiesFinancial information and decisions

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Understand why businesses require finance, including reasons such as initial funding, expansion capital, and extra working capital. Recognize the distinction between short-term and long-term financial needs

This point belongs to Business finance: needs and sources, especially Business finance: needs and sources outcomes.
You need to be able to understand why businesses require finance, including reasons such as initial funding, expansion capital, and extra working capital. Recognize the distinction between short-term and long-term financial needs.
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Description

Expansion of Bakery Operations

The bakery currently operates with a small team and has a steady customer base. They are looking to add a café to attract more customers and increase sales.

a
State one reason why the bakery needs finance for this expansion.
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Related learning objectives

Identify the primary sources of finance available to businesses, including both internal and external options, as well as short-term and long-term sources. Examples include overdrafts for short-term needs and debt or equity for long-term needs. Discuss the significance of alternative funding methods like micro-finance and crowd-funding. Evaluate the key factors influencing financial decisions, such as the business's size and legal structure, the amount needed, duration, and existing debts. Recommend and justify suitable financing sources based on specific scenarios.
Business finance: needs and sources outcomes

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