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A business requires funds to purchase fixed assets like land and building, plant and machinery, furniture etc. These assets may be regarded as the foundation of a business. The capital required for these assets is called Fixed capital. A part of the working capital is also of a permanent nature. Funds required for this part of the working capital and for fixed capital is called long term finance. Various sources of long term finance are:
1. Capital Market which includes Stock Market and bond market.
2. Financial Institutions like IDBI, ICICI
3. Investment institutions like mutual funds, UTI
4. Leasing through banks or other sources
5. Foreign institutions like World Bank
6. By making collaborations with foreign companies
7. From NRI's (Non Resident Indians)
8. Retained profits
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Sources of finance for expanding the business?
sources of finance for expanding the a bussiness? short term medium term half term and long term
Long term finance sources?
Following are long term finance source:Bonds issueDebenturesIssuance of share capital
Two short-term sources of finance?
Following are two short term sources of finance: 1 - Creditors 2 - Banks
What is the sources of working capital?
Also known as capital employed its the total long term finance injected in the business i.e. Long term debt + equity
Long term finance sources of public limited company?
Public limited companies can get long term financing from banks or finance companies. Either financial institution will assess the company's creditworthiness to determine if they would like to create a loan for them.
What are the types of long term sources of finance?
In a household- home mortgages and saving. In a Business- owners capital, retained earnings, state grants, debentures/ long term loans, sale and lease back
Sources of business finance?
bank over draft that is short and long term, sub contracting, debentures, issuing share, mortgage, leasing,
What are the Sources of finance available to a public limited company?
Their main source of finance is through sale of shares however they usually take out long term bank loans as well. Dependant on the company of course :)
Why different sources of finance might be neededrevenue expenditure and capital expenditure?
this is beacuse revenue expenditure is for a short period of time therefore it wouldnt make sense for it to get a long term loan neither would it make sense it capital expenditure which is long term uses a short term method of finance
Name two short term and two long term sources of finance?
Short Term -Selling off inventory -Liquidating other assets (investments, capital, etc.) Long Term -Equity Invesment through shareholders -Debt, by borrowing money from banks
What are the functions of multinational companies?
short term finance long term finance foreign trad function
What is the difference between short term finance and long term finance?
1. Most short-term sources of financing occur over a period of less than a year to one year, although some sources can last up to three years or longer. Long-term financing that a longer period of time about 3-30 years or more. like home mortgages are typically available in 15- and 30-year durations. 2. Because short-term financing is repaid over a shorter length of time, the interest rate or cost to borrow money is smaller. Long-term sources such as bank loans have a higher interest rate due to the amount of time it takes to finance the loan and repay the capital.
