Lorraine has received a lump sum of R500 000.00 from her retirement fund. She intends to use these funds to start a student accommodation business. In order to start this business, Lorraine would need approximately R1 million, funds are needed for building the students accommodation apartments and to register with various regulatory bodies. She has to source additional funding in order to realise this dream. In the business plan, Lorraine has outlined the following: • Accommodation will be offered ONLY to students in Cape Town, Johannesburg, Mpumalanga and Polokwane. • ONLY females will be approved to reside in these houses, between the age of 18 - 35. • Marketing of the business will be done on community Radio stations only at the four mentioned cities. • It is going to be a family business, . Q.4.2 Suggest any TWO sources of finance that Lorraine should consider. Justify your choice. Tip: you will be awarded marks for theory and justification (8)
1) The models of the division are:
- The administrations are accessible just in Cape Town, Johannesburg, Mpumalanga, and Polokwane.
- Only females who are mature between 18-35 can profit this office
The restricted accessibility of administrations is chiefly because of the way that immense measure of cash is needed for the broad organization, which she can't bear the cost of now.
2) She can raise the assets from financial backers. By selling a stake in the organization, she can collect a lot of cash. Likewise, she can contact the banks for something similar. She can take business credit for something very similar.