FINDING SOURCES OF FINANCING Three basic types of financing can be identified. These are: 1. Profit retention: This is an approach where cash is not withdrawn in form of dividends but instead uses the cash to finance the business. 2. Spontaneous financing: This is financing arising from increased sales. A such, there income to buy more inventories and suppliers can extend credits when they realize there is good business. 3. External financing: This comes from outside investors. The investors include creditors, equity investors or owner piping more finance in business.