A business is purchasing a new property - HSC - SSCE Business Studies - Question 2 - 2019 - Paper 1

When a business is purchasing a new property, it is essential to consider the most suitable source of finance that aligns with the nature of the investment and the financial strategies of the business.

1. Shares: This source involves selling ownership in the company, which could dilute control. While it can raise significant capital, it is not specifically suited for property acquisition.

2. Mortgage: This is a secured loan specifically designed for buying real estate. A mortgage allows a business to borrow money against the property itself, enabling them to pay over time while acquiring the asset immediately. Therefore, this is the most appropriate option for purchasing property.

3. Debenture: This is a type of long-term security yielding a fixed interest but is not typically related to real estate purchases directly.

4. Letter of credit: This is used primarily in international trade and does not relate to property financing.

In conclusion, the most appropriate source of finance for purchasing a new property is clearly B. Mortgage.