What is the difference between internal and external sources of finance?

The main internal sources of finance for sole proprietors are as follows;

· Owner's funds

· Selling personal assets

· Profits

· Depreciation

External sources is capital obtained from financial institutions, such as banks, and from individuals willing to provide finance.

The main external sources of finance for sole proprietors are as follows;

· Bank loans

· Mortgage loans

· Grants and loans

· Hiring and Leasing