Sources of Finance

A source or sources of finance, refers to where

a business gets money or fund for their
business activities. The source can be of two
types
1. Short Term Finance

2. Long Term Finance

 1. Short Term Finance
Short-term financing may be defined as the credit or loan
facility extended to an enterprise for a period of less than one
year. Following are some short term sources of finance.
I. Indigenous Banker
II. Trade Credit
III. Installment Credit
IV. Advances
V. Account Receivable credit or Factoring
VI. Accrued Expenses
VII.Deferred Income
VIII.Commercial Paper
 2. Long Term Finance
Long-term finance can be defined as any financial instrument
with maturity exceeding one year (such as bank loans, bonds,
leasing and other forms of debt finance), and public and
private equity instruments. Following are Long Term sources
of Finance
I. Equity Shares
II. Preference Share
III. Debenture & Bonds
IV. Retained Earnings
V. Bank Loan
VI. Public Deposits