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

To determine the most appropriate source of finance for purchasing a new property, it is important to consider the nature of each option:

1. Shares: This involves selling ownership stakes in the business, which may not be ideal for immediate property purchases as it dilutes existing ownership and is better suited for raising equity over time.

2. Mortgage: This is a loan specifically for purchasing property, secured against the property being purchased. Mortgages typically have lower interest rates compared to other loans, making them a common choice for buying real estate.

3. Debenture: This is a long-term security yielding a fixed interest rate, issued by a company and secured against assets. While it can be used for funding, it is not as direct as a mortgage for purchasing property.

4. Letter of credit: This is a document from a bank guaranteeing a buyer's payment to a seller. It is typically used in international trade but is not ideal for financing real estate directly.

Given these considerations, the most appropriate source of finance for purchasing a new property is B. Mortgage.