SOURCES OF EXTERNAL FINANCE - Family and Friends
Family and friends - Investment from people known to the entrepreneur. May want to help support a business if they have some money. ADVANTAGES • May be flexible repayment terms and conditions. • May offer loans without collateral • May provide interest free or low rate finance DISADVANTAGES • Amount may be limited • May place pressure on relationships • Lenders may lose their money • They may also want to be more involved in the business BEST FOR ... Small businesses running as sole traders or possibly a partner.