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Internal Business Finance is departmental charges for production and such. External business finance concerns transactions that make money for the business outside of the organization, such as sales.

Both this financial terms have great impact on running business. They are the key and most important difference between these two funding options. When a company uses internal finance, it takes advantage of existing supplies of capital from profits and other sources. External finance involves the use of money new to the company, from outside sources, to fund planned activities. External finance requires either going into debt or giving up control and flexibility.

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Q: Difference between internal and external business finance?
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Is there a difference between internal and external financing?

Internal means it is contained inside something; external means it comes from outside.


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