CAIE A-Level Business 5.1.1 Need for finance

Explain one reason why a business may need finance.

Indicative content

Responses may include:

AO1 Knowledge and understanding - 1 mark for identifying one reason why a business may need finance Reasons why a business may need finance include:

- start up a business

- grow/expand the business

- survive

- run the business

- working capital

- buy capital equipment

AO2 Application -2 marks ${ }^{\text {± }}$ for developed explanation of one reason why a business may need finance.

1 mark ${ }^{\Delta^{* *} \text { f for limited explanation of one reason why a business may need finance. }}$

- start-up finance or capital, purchase assets e.g. premises, equipment, machinery, tools, vehicles

- pay for market research and promotion to develop product and create demand

- need more finance in the early stages before getting established or when facing a crisis

- money to start trading, pay staff wages, utility bills and suppliers on time

- having funds to pay for additional assets, new machinery, new staff, additional raw materials

Accept all valid responses.