Clariton Antiques Ltd have just been approached by'We Finance Limited', a venture capital organisation, with an offer to finance their expansion by offering the full 0.5m for a 20% stake in the business.

Alternatively they can use the services of a finance broker to obtain a bank loan. The broker will charge a 1% fee on the amount secured and interest on the loan would be 2% APR payable over 10 years.

You are required to:

2.2 Explain the importance of financial planning for Clariton Antiques Ltd wift reference to;

a) budgeting

b) implications of failure to finance adequately

c) overtrading

2.3 Give an assessment of the information that will be needed to make decision on financing the takeover by;

a) The Partners

b) Venture capitalist [We Finance Limited)

c) Finance broker