Internal financing

INTERNAL FINANCING - Financing projects through retained earnings.
INTERNAL FLOAT - Elapsed time for processing checks. Also called administrative float or processing flo...

Internal Financing
Funds generated through a corporation's normal business operations.
See: Internal Expansion ...

internal financing
funds produced by the normal operations of a firm, as distinguished from external financing, which includes borrowings and new equity.
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internal expansion The growth of assets due to internal financing or appreciation, as opposed to external financing or acquisition.

An alternative model of financial structure is the 'pecking order' model, according to which managers use external financing only when there is insufficient internal financing.

Although companies may prefer to use internal financing to minimize the issuance (transaction) costs, the trend in financing depends critically on the firm's life cycle.
By Meziane Lasfer
Creating a Sustainable Development Policy
Checklists ...

Growth of assets resulting from internal financing or internally generated cash flow.
Internal finance
Finance generated within a firm by retained earnings and depreciation.

Internal expansion
Growth of assets resulting from internal financing or generated cash flow.
Internal finance
Finance generated within a firm by retained earnings and depreciation.

See also: Expense, Mergers, Internal expansion, Capital structure, Cost of capital