7.1 Sources of Funding (15 marks)Provide an explanation of:• What is the total amount of funds needed by your business?• Sources of Funding? Bank Loans, Investors/Business Angels, Crowdfunding etc? (For Crowdfunding provide a brief account as to how this would be implemented e.g. using a tier system for funders). A combination of sources is expected.• What will these funds be used for? This should match exactly what is in your spreadsheets e.g. Cash Flow and Income Statement.7.2 Start-up Costs (15 marks)Put forward the main start-up costs that are needed to launch this new venture.Account also for the following:• Depreciable vs Non-Depreciable assets• Depreciation rate: 20% Straight line• Additions in Years 2 and 3. Please account for additional expenditure on items such as equipment, premises etc. in these years (if relevant) (please note for draft 1 just concern yourself with Year 1 only)7.3 Loan Repayment/Dividends: (10 marks)• Briefly discuss the Loan Repayment schedule• No unnecessary delays in repayment – interest rate• Dividends to investors/funders– how frequently are these to be paid?7.4 Cash Flow (30 marks)Cash Flow is one the most important factors for any new business – it is essential that you clearly understand how your business is generating cash.This section is about discussing your financials, you do not have to cut and paste the excel spreadsheet here. Please discuss all 3 years on a month by month basis. There is flexibility as to when your first month of trading will be, perhaps June 2022 or January 2023.(please note for draft 1 just concern yourself with Year 1 only)Your discussion will include a statement of key assumptions, including aspects such as:• Paying off any business loans –if paying off early, please outline reasoning, bearing in mind the need for liquidity• Maintenance of appropriate cash reserve – 1-2 months’ cash payments• Receipts timetable – Receivables (Debtors). What are the terms of credit?• Payments to Suppliers timetable – What are the terms of credit for Payables (Creditors)?• Payments for Overheads (Expenses) timetable. Is this monthly, bi-monthly or annually?• Start-Up Costs in Year 1 onlyA Cash Flow Statement will be provided in the appendices.7.5 Income Statement (Profit & Loss) (30 marks)A Profit and Loss account for the three years is required. Provide a short analysis of the situation in terms of profit and loss for each of the three years. An Income Statement will be provided in the appendices. (please note for draft 1 just concern yourself with Year 1 only)• Cost of Sales. Please explain how this figure is calculated• Tax. No tax to be paid on losses• Tax on Profits to be paid in the following year• All figures are inclusive of Value Added Tax (VAT)
