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Sources of Finance

(c) Analyse two sources of finance, other than selling shares, FN could use to purchase the neighbouring farm. (8) Summer 2019 Paper 23

Bank loan - FN has been established for 10 years, so likely loan will be granted. But interest will have to be repaid which may mean that FN has even worse cashflow. Mortgage - The farm is a property so a mortgage would be suitable. Mortgage would have a lower interest rate than a bank loan but still reduces the profits of the business.