What are the sources of fund in finance and accounting?



Source of finance can be simply explained as follows −

  • Based on time
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
Updated on: 2020-08-12T11:18:05+05:30

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