For any business manager, securing capital is a critical hurdle. When it comes to financing businesses, there are two options to choose from.
Posts published in “SOURCES OF FINANCE”
When companies need money, they have many choices of sources of finance. And, the choice they make can tell you more about the company.
Finance managers need to consider many factors when it comes to making the strategic finance choice between alternative sources of finance.
Subsidies are sums of money given by the government to producers of commodities which are widely used by the majority of the society.
Government grants are non-repayable funds, ‘financial gifts’, a complimentary finance that does not need to be repaid in the future.
Business Angels are informal wealthy investors who invest in high-risk and high-return entrepreneurial businesses at a very early stage.
Venture Capital (VC) is capital invested in business start-ups or growing small and medium businesses offering innovative technology.
Crowdfunding is the use of small sums of money from a large number of private individual people to finance a new business venture.
Share issue is the process by which limited companies pass on new shares to investors. All limited companies issue shares.
Convertible bonds, or convertible debentures, are types of bond that the holder can convert into shares in the issuing company.
Bonds, or debentures, are fixed-income financial instruments, essentially long-term loans issued by a business to investors.
A mortgage is a long-term bank loan used by the business for the purchase of land or buildings. Mortgages are secured bank loans.
A long-term bank loan is provision of finance by the lender to the business for a long period of time. The lender is a commercial bank.
The business has two options when it comes to using capital for growth. As long-term finance, it can choose Debt Finance or Equity Finance.
Hire purchase occurs when an asset is sold to the buyer who agrees to pay fixed payments over an agreed period of time. How does hire purchase work?
Sale-and-leaseback is a transaction when the business sells a particular Fixed Asset and immediately lease that asset back.