In our business world, “capital is the lifeblood of every business” (Smith, 2012). Capital can start a business, purchase non-current assets, e.g. machinery or plant, and pay for daily expenses, e.g. salaries, lighting, electricity, etc. Every business should have someone to manage finances with different types of short-term internal finances in mind. , long-term internal, short-term external and long-term external financial resources. These are the four main ways to raise capital, but these sources may be linked to different repayment rates and terms and the amount that will be received. When the owner and manager consider using internal or external financial resources, they must take into account the purpose, amount, repayment, interest and security, which bears the name PARIS. The objective is to identify the appropriate type of financing, amount is the amount to borrow, repayment is the amount and when the business must repay the financing. Interest is the financial cost and security is the company's need to place business assets or personal household assets on escrow before receiving financing. These are the main concepts that the owner and manager must remember before applying any type of financing. (Cox and Fardon, 2009) The director and manager must think effectively about increasing capital in an effective manner that includes lower repayment and control of the business. (Gillespie, 2001) 2) Internal finance Internal finance uses the profits or capital that the business has earned or owns and it does not involve any agreement of directors or officers which is the decision of the owner. (Atrill and McLaney, 2011) There are 4 main types of internal sources which are "Personal Savings", "Retained Earnings", "Working Framework...... middle of paper ...... these is suitable to their business and should keep PARIS in mind when applying or using any type of financing. Internal finance uses what the company has earned over several years, but not all companies can make a profit in the first few years. They therefore need the support of external funding, although the external funding must repay the funding in the future. External financing represents an important role in improving business financing because the company receives huge capital from the bank or government within a few days or weeks. Additionally, internal financing takes time as the company has to wait a few years to build up the retained earnings and can only be used in small investments or expansions. Based on this evidence, using external financing can increase the company's capital in the blink of an eye and repayment depends on the amount of financing requested by the company..