American Chicken Ltd is a fast food company based in Penzance specializing in burgers and pizzas. They are currently making a profit; however they have set themselves two goals for the next financial year, which are:• To earn more money.• To expand and open another store in Hayle. This report is intended to advise American Chicken owners on the best ways to obtain the financing needed to achieve their goals, particularly for expansion and opening a new store in Hayle. Overview: Whether a business is starting up or growing and expanding, it needs financing to do so. The type and amount of finance depends on several factors which may include: • The type of business: a sole trader will find it much more difficult to obtain finance than a PLC or Ltd. A partnership will have income from both partners where as a firm individual will have the income only of himself. • The development stage of the business – a new business will find it more difficult to obtain finance than an established business. As the business develops, it becomes easier to convince outsiders to invest in the business. It will also be easier to get loans since the company has assets to offer as collateral. • How successful the company is: A good record of success will encourage both financiers and investors. Lenders will have confidence in the company's loan repayment. Investors will be eager to invest to share in the profits made by the company. • The state of the economy: In a boom period, business confidence will be high. It is easy to get funding from both loans and investors. A recession has the opposite effect as investors will be less inclined due to high interest rates. High interest rates also increase the cost of borrowing... half the paper... the advantage is that the company will likely not have to pay the venture capitalist back the borrowed money, since the venture capitalist assumes the risk of the company because he believes in the future success of the company. Another advantage is that the venture capitalist can also offer expert advice and industry connections for the company. This can be vitally important when advertising or when looking for the best supplier. This also benefits venture capitalists, as they feel they have an intimate involvement in the company's activities. However, some disadvantages include the fact that it is difficult for a company to get a deal with a venture capitalist due to the accounting and legal risks it must take. A start-up will also have to cede part of the ownership of the business to the venture capitalist who invests in it.