sources of finance

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FINANCE :

FINANCE Introduction: “ Money is an arm or a leg . You either use it or loose it”. “Arthah Sachivah” means money reigns supreme. Thus, finance is the backbone of every business.

Why we need finance ?:

Why we need finance ? Purchasing of fixed assets Preliminary expenses Promotion of business Starting up new plant Entering international market Working Capital

Internal Sources :

Internal Sources Personal savings Retained profit Working capital Sale of assets

Sources of Finance: Duration :

Sources of Finance: Duration Long-term sources of finance : Long-term financing can be raised from the following sources: · Share capital or equity shares · Preference shares · Retained earnings · Debentures/Bonds of different types · Loans from financial institutions · Loan from state financial corporation · Loans from commercial banks · Venture capital funding · Asset securitisation · International

Medium-term sources of finance: Medium-term financing can be raised from the following sources: :

Medium-term sources of finance : Medium-term financing can be raised from the following sources: · Preference shares · Debentures/bonds · Public deposits/fixed deposits for duration of three years · Commercial banks · Financial institutions · State financial corporations · Lease financing / hire purchase financing · External commercial borrowings · Euro-issues · Foreign currency bonds

Short term sources of finance: Short-term financing can be raised from the following sources::

Short term sources of finance : Short-term financing can be raised from the following sources : . Trade credit · Commercial banks · Fixed deposits for a period of 1 year or less · Advances received from customers · Various short-term provisions

On the basis of :

On the basis of Internal- - Personal Savings Retained Profit Working capital Sale of assets External– Ownership Capital Non-ownership/Borrowed Capital Ordinary shares Debentures Preference shares Loans Overdraft facilities Trade credits Venture capital Leasing Factoring

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