What are the sources of fund in finance and accounting?
Source of finance can be simply explained as follows −
| LONG TERM | MEDIUM TERM | SHORT TERM |
|---|
|
|---|
| BASED ON TIME |
|---|
|
|
|
| Equity shares | Preference shares | Trade credit |
| Preference shares | Debenture/Bonds | WC loans |
| Internal accruals | - financial institutes
- government
- commercial banks
| Fixed deposits (period of 1 year) |
| Debentures/bonds | Advances from customers |
| Term loans | Creditors |
| Venture funding | lease finance | Payables |
| Asset securitization | Hire purchase finance | Factoring services |
| International finance |
| Bill discounting |
- Based on ownership and control
| Owned | Borrowed |
|---|
|
|---|
| Based on ownership and control |
|---|
|
| Equity capital | Loans from
Financial institutions
Commercial loans
|
| Preference capital |
| Retained earnings |
| Convertible debentures | Debentures |
| Venture fund/ private equity |
|
- Based on source generation
| Internal | External |
|---|
| Based on source generation |
|---|
| Equity capital | Retained profits |
| Preference capital | Reduction in working capital |
| Retained earnings | Sale of assets |
| Convertible debentures |
|
| Venture fund/private equity |
|
Published on 12-Aug-2020 11:18:05
