CONTINUATION OF CHAPTER 4

SUBJECT MATTER

A. TOPIC: CHAPTER 4: CAPITAL SOURCING

• Sources of Capital

• 5 C’s of Credit
CONTENT STANDARD:
The learner demonstrate understanding of
environment and market in one’s locality/town.

PERFORMANCE STANDARD:
The learner independently creates vicinity map
reflective of potential market in one’s locality/town.

OBJECTIVES:

• To recognize the importance of capital sourcing.

• To enumerate various ways on how to raise capital

for the business.
 Development of the Lesson
(4 A’s Format)
A. ACTIVITY

Guide Questions:

1. What are the primary sources of capital?

2. What are the 5 C’s of credit?
3. What are the other sources of capital?
 B. ANALYSIS

CONCEPTS: CAPITAL SOURCING

• Personal savings – the most common source of equity.

• Borrow from the family and friends – the easiest way

to source funds.

• Business loan from a bank – the most popular and the

most difficult source of business capital in the Philippines.
 5 C’s of Credit
1. Character – it refers to a borrower’s reputations or track
record for repaying debts.
2. Capacity – it measures the borrower’s ability to repay a loan.
3. Capital – down payments indicate the borrower’s level of
seriousness which can make lenders more comfortable in
extending credit.
4. Collateral – any personal asset that the borrower pledges in
order to support the loan.
5. Conditions – the state of the overall economic environment –
specifically the factors that might have affect your industry
and business.
 OTHER SOURCES OF
CAPITAL
• Home Equity loan – the borrower uses the equity of
his/her home as a collateral.
• Credit Card – issued by a financial institution that
lets you borrow money to make a purchase.
• Venture capitalists – employees of venture capital
firms that invest other people’s money into companies.
• Angel investors – wealthy individuals who invest
their own money into companies.
• Small business loans from government
agencies – business – oriented agencies (SSS,
Pag-ibig, etc.)
 C. ABSTRACTION
Sourcing the necessary capital for start- up business is
a full time job on its own. It is no easy task to do
especially when the entrepreneur has tight financial
constraints. For most people, they come up with an idea
and the desire to venture into business ahead making
them try hard and earn money to allocate funds for the
dream business. Finding a source of capital is one of the
first roadblocks in starting up any business, this is
expected as the first step are always the hardest.