20.12 Lucinda and Lister are sole (and equal) shareholders and directors of L&L Limos Limited, a company which runs a small fleet of limousines for hire for weddings and parties. Each year the company has gradually increased its revenue and has developed a reputation for reliability. There is no direct competitor for their service in their own town, and increasingly often the company is asked to undertake business in neighbouring towns and cities. Quite often these days the directors have to turn business away because all of the available cars are booked. The option of expanding the fleet and taking on new drivers looks increasingly attractive.

i) Describe the sources of finance that might be suitable to finance the proposed expansion.

ii) Identify the additional costs which might be involved in the expansion.

iii) Briefly identify and describe any risks associated with the expansion and its financing.