explain the various sources of finance

Answer Posted / kala madhavan

Sources of finance basically based on the capital required
to the company.


Sources of Finance: Duration

Depending on the date of maturity, sources of finance can be
clubbed into the following:

Long-term sources of finance: Long-term financing can be
raised from the following sources:
# Share capital or equity share
# 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:
# 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:
# Trade credit
# Commercial banks
# Fixed deposits for a period of 1 year or less
# Advances received from customers
# Various short-term provisions

Is This Answer Correct ?    57 Yes 11 No



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