Resource Mobilization — Entrepreneurship STD 11 Commerce — Question

The entrepreneur always makes the initial investment capital available. Either he invests his personal cash or converts his assets into cash for investment.
Generally, the entrepreneur very often mobilizes his personal resources for enterprise development using his private assets or from his members of the family, dear and the near ones. The investors from the family may not have a legal hold on the enterprise. They tend to remains as silent partners extending informal assistance.
Sources

1. Personal Savings: Past savings, if any, is the most conventional source of financing, dependable, readily available and without incurring any liability. This accumulated from of minor or major savings done by entrepreneur is an internal source and meets out small, short term requirements.
2. Friends and Relatives: Arranging finance from near and dear ones viz. (a) friends (b) relatives (c) known persons, in informal manner is even a popular source of financing.
3. Chit Funds: This customary source where in some members who might be friends, or known etc, form a type of club, committee, party, association, etc., keep paying monthly deposits privately and can claim the 'chit' if his sudden demand for money i.e. like 'kitty'. This premature encashing of the deposited amount is like an internal source of financing and personal.
4. Deposits from Dealers: When the dealers or distributors are appointed by the business firm, the dealers selected are required to give "security deposits" to the entrepreneurs, depending upon the reputation, goodwill and creditability of the enterprise. This can be used as a short term source of financing.