When a company seeks to raise finance it must ensure that it has a suitable mix of long, medium and short term sources available, however, the availability of finance is often determined by factors such as ‘age’ of the company.
You are required to:
Critically assess the differences in finance sources and availability between an established company and a relatively new company
When lending to smaller or newer companies what considerations would lenders examine before deciding whether to lend to the company or not
Previously companies with high gearing have been considered to be risky to lend to, debate why this was considered the case and why companies may not always be risky to lend to