"Businesses can obtain cash from a variety of sources, which are divided into three categories. 1. Period-based – The period basis is separated into three dub-divisions. • Long-Term Funding – This long-term fund is used for a period of more than five years. The money is made up of preference and equity shares, as well as debentures and other debt instruments, and it is gathered from the capital market. • Medium-Term Funding – These are short-term funds that last longer than a year but less than five years. Borrowings from a public deposit, commercial banks, commercial paper, loans from a financial institute, and lease finance, among other things, are among the sources. • Short-Term Financing – These are monies that are only needed for a year. These sources include commercial bank working capital loans and trade credit, to name a few. 2. Ownership-based financing — There are two types of ownership-based financing. • Owner's Fund - Also known as owner's capital, this fund is funded by the company's owners. Preference shares, retained earnings, equity shares, and other types of securities are used to raise cash. These are long-term capital funds that serve as a foundation for owners to gain control over the company's administration and operations. • Burrowed Monies - These are funds that have been acquired over a period of time through borrowings or loans. This is the most prevalent and widely used source of capital among enterprises. Loans from commercial banks and other financial institutions, for example. 3. Generation-based – This source of revenue is divided into two categories. • Internal Funding - The funding came from the organization's proprietors. This example involves asset sales and retained earnings, among other things. • External Source - The money comes from somewhere other than the company. For example, public issuance of stock shares, debentures, commercial bank loans, and so on."

Jincy Anna Joy

42 resources

0

0

0

Like