Introduction: Financing is one of the popular term to all types of business for gathering capital

and fund. Every business has a different process of colleting funds from several sources and the
several sources can be long term or short term. Financing important for all types of business like
Sole proprietorship, Partnership, Public and private limited companies.

Figure1 : Types of Business

Sole proprietorship

Sole proprietorship business is known by one man business. Normally sole business means the
business which runs, operates and every tasks of business done by only one person. To increase
the amount of business long term financing include bank loan, venture capital, hire purchase is
required.
 Figure2 : Sole proprietorship

Bank loan : Bank loan helps sole proprietorship to arrange fund and expand business for long
period. Being easy and small formatted business like sole proprietorship bank provide loan
justifying the earnings and the business location with a small amount of interest.

Venture capital: Venture capital provide loans to sole proprietorship business with interest and
profit, terms and condition. Being a small business there is a lacking of large amount of fund.
The lacking get overcome by venture capital

Hire purchase: Sole proprietorship business can be small in amount but there is a need of fixed
assets like furniture, machineries, and also funds. The need get filled by hire purchase for sole
proprietorship business.

Partnership Business
Partnership is a type lf business where an agreement between two or more people who agree the
terms and condition and the operational activities of the business and get owner by signing in
contract paper is called partnership business. For long term funding leasing, bank loan, and extra
partners are required.

Figure 3 : Partnership Business

Bank loan: Bank loans always plays a crucial role in several types of business Sometimes
the partnership sake of large amount of capital and fund to perform external activities by
getting bank loan

Supplementary Partners: Partnership business is run and build by a contract paper. But
normally this business contains 2 to 20 partners and 10 for banking partnership business.
Sometimes the given fund of partners isn’t enough for these reason partner can gather funds by
adding supplementary partners.

Leasing : partnership business is smaller than companies organisations. For these reason the
business don’t have any large capital. For various purpose of business taking lease is a good
option for long term investment and business expansion.

Private Limited Company

Private limited company is a small type of limited organisation which limits the liabilities of the
shareholders by a specific amount of share. Private company can finance for long term period by
using shareholders fund, bank and other financial institutions and venture capital

.Figure 4 : Private limited company

Shareholders Fund: A private limited company limits the liabilities of the shareholders. For
having no governmental permission the business can’t publically sell share to buyers. So for long
term financing it uses shareholder’s fund.

Venture capital: new startup of private limited companies can gather fund from venture capital
by providing certain amount of interest.

Bank and other financial institutions: because of having no permission of publishing share
towards public private limited company can only gather funds for business growth and expansion
bank and other financial organisation provide funds by taking a little profit.

Public limited company

A public limited company is a separate legal entity which offers share towards public to be
traded in stock exchange. The operation and the owners are totally separated from one another.
Because of having no restrictions unlimited share can be issued by public company. A public
company can manage funds from issuing share, Bond and debenture.
 Figure5 : Public limited company

Issuing Share : Public limited company can arrange fund from the shareholders. If a
shareholders buys share and the amount comes to the related company by doing these several
share issue public company manage long term funds.

Bond: Bond is a type of long term funding source for public limited companies. Only public
limited company has the right to public towards public by backing up specific assets.

Debenture: Debenture is a long term funding source for public limited companies. The time can
not be exceed than 10 years . For being a long term process debenture is one of the attractive
source for long term growth and business expansion for public companies.

Similarities and dissimilarities of different sources of fund at each business

Finding sources Sole Partnership Private limited Public limited

Proprietorship company company
Owner’s Capital Selling products or For For the The owners
services is the partnership expansion and capital of is
only source of business the growth of the known as
funding for sole partners business the shareholder’s
 proprietorship. invest shareholders of equity.
money to private limited
begin and company can
run the do re invest for
business capital
Bank Owner of small Bank loan is Becoming a Public limited is a
Loan proprietorship an crucial private limited legal and
business can’t source for company and constitutional
manage fund to partnership being different business. For this
expand the business to from sole and reason public
business. . For this expand partnership limited company
sole business funds business and business bank can gather money
capital from bank long term offer long term from bank
by providing financing capital and anytime by using
interest. growth. business the name of
growth and can business. Because
get credit from the business uses
financial as a different and
institutions. legal entity.
Debenture Not Applicable Not Not Applicable Public limited
Applicable company has so
many positive
sites than other
companies.The
company can get
loan from by
issuing debenture
which can be
validated for 10
years.
Abilities to Not Applicable Not Not Applicable Only public
publish share Applicable limited company
 can issue share
towards public.

Additional Not Applicable For a better Not Applicable Not Applicable

partners growth and
long term
fund the
partners of
partnership
business can
add more
partners by
getting
initial
capital.

Conclusion: In this competitive market no organisation is available without financing. For a

better operation and growth of business fixing the source of fund is important for all types of
business including sole proprietorship , partnership, Private & Public limited companies. For
better outcome proper financing sources and process should be applied.