Sharon runs a small business that has a turnover of A$250k and A$90k profit. She has recently had a request from a very well-known international customer who would like to purchase 4000 units of her products. This is 4 times her current volume and whilst it will transform the busines it will also need a significant investment of approximately A$500k. She has done the financial plans and has calculated that there is a 12 month ROI and it would be highly profitable.

She is now considering ways to raise the funds, and which would be best for her. She currently owns 100% of the business and has had bank loans previously that she has successfully repaid on time.

She has asked for your opinion on the following:

• The pros and cons of equity and debt funding she has asked you to provide examples to make it easier to understand
• What you think would be the best way to fund the A$500k with an explanation of why