Universidad Autónoma De Nuevo

León
Facultad de Contaduría Pública y
Administración

Financial Sources

GRUPO 6DI

Evidence 1: Essay

Profesor: Irving Gonzalez Martinez

Mendez Garcia Ivan Alberto 1853868

Ciudad Universitaria March 01 Of 2021

 First of all In this work I am going to showcase all the different sources of
financing and its importance and what is the difference between but before all
these we are going to say what is a source of financing this is a form that an
enterprise can get assets or capital to be able to start a business or to expand it or
to be able to have a bigger push also the objective of this evidence is to show what
are the main differences between an external and internal source of financing and
some of the main examples with its definition and an example of a company that
gives the service or uses it and also to help them to see which option is the best of
all for a person to start a business by the method of a financing source

The External sources of financing are resources obtained from people,

banks or entities outside the business itself. These outside resources can be on
short-term because they will remain with the company for less than a year. Or
resources outside the medium and long term because they will remain for more
than a year. These types of sources have a cost or generated interest that the
enterprise got to pay for the assets that are granted and is done by a mutual
contract for both enterprises.

There are some sources that are short term external sources such as loan,
capital loan, leasing, and capital risk next we im going to explain all of the
sources mentioned before.

The first one is The loan which is a short-term external source of financing
in which a person or organization grants, through a contract or agreement between
both parties, an economic amount or object to another person or company, in
exchange for the generation of an interest , The loans are considered a financial
operation of provision that is unique and the consideration multiple The
amortization, that is, the gradual payment of the loan will be made according to the
duration of the loan, also this is going to create or generate an interest of the
quantity previously loaned, an example of these organizations could be prestamo
express or first cash that provide this type of services. The next one is Capital
loan (emprestito) which is a short-term or long term (depends the case that is
needed) external source of financing that occurs when a person needs a bigger
economic financiering and its hard to get only from one person or loaner in this
situation the loan divides into little loans that are subscript from a lot of a loaners
(this type of loaners are governmental) and acts as the same as the loans but has
the intervention of an intermediary an example of this could be el banco del
bienestar that provides this type of services. The third one is leasing which is a
another short-term external source that occurs when a company needs an asset (it
can be machines terrains or even building or equipment) and is the action of
acquiring the assets and using it from a certain time
by a contract between the enterprise and the leasing company (the one that gives
the service) for a use as If were for them (to have them as your property by your
name) for a certain price and interests (that are defined by the company or the
time)and when the contracts is over the enterprise decides if they want to bought
them or if they want to increase the time of the contract if they don’t want it
anymore they give back the assets to the leasing company an example of this type
of company it could be the bank bbva that provides this service. And the last one
is the capital risk, and this is a new form of financing of external source that is for
a short-term that financing companies what they do is that they give a lot capital
into new enterprises that are starting in the market and it help this companies to
get bigger assets and incomes that they would obtain if they were taking a bank
loan and it also secures that the financing companies to be a partner and also to
give them a further push to the enterprise that was created and decided to help,
and giving them more incomes of them in the future this is usually done by startup
companies one of this type of companies is Dalus capital that is one of this that
provides this service

Now we have the external sources that are with a Long-Term period of time
The Bank Line of Credit, Commercial discount, The Factoring, The Financing
by providers

First we have The Bank Line of Credit is an external source of financing

and is a long-term and is when a company goes to a bank to get a permanent
credit (gets assets) for a period of time and it comes with interest and also is done
by a contract between the bank and a person or company this is normally used
when a company needs a bigger quantity of assets and when it exceed the
capacity of a loaner another difference is that the person must accomplish the time
that is stipulated by the bank an example of this is Banamex the next external
source is the commercial discount is an external source of financing and is for a
long-term and is offered by financial entities. A client presents a credit title to a
financial institution so that it can advance the amount of the credit that has not yet
expired. This supposes the session of said credit to the entity, which from now on
will be in charge of the management of credit collections from the customer's
debtor, The company will receive an advance of the nominal value less the
interests that are generated from this operation and the management expenses. In
addition, it will assign to the entity a portion of the future collection rights (not yet
expired) of the company, duly documented in the credit document. An example of
this is the Grupo Chedraui another external source is The Factoring is an external
source of financing and is for a long-term and it consists of the acquisition by the
factoring company of credit rights from the sale of real estate,
the provision of services or the performance of works that the client or company
has in their favor for a specific price. In other words, financial factoring consists of
selling accounts receivable to a company that will be in charge of collecting, the
sale is made at a discount in exchange for immediate liquidity. It should be noted
that the sale is made to a factoring company, that is, a company that buys
accounts receivable at a low price and then collects the money with interest. This is
how factoring is considered a strategy to obtain liquidity in organizations at certain
times an example of a company that provides this service is la Asociación
Mexicana de Factoraje Financiero y Actividades Similares AC (AMEFAC) and the
last external source for Long-Term is The Financing by providers is a external
source of financing for long term and it consists in Obtain all the raw materials
necessary for the production process by making an agreement in which the
company agrees to pay in the future without interest charges. The debt must be
solved, in most cases, in terms of 6 or 12 months. Small and medium-sized
companies are the ones that mostly resort to this type of financing, since these are
the ones with the most restrictions when requesting loans from financial
institutions. In turn, most companies spend the most on: purchase of raw materials,
payment of salaries, manufacturing expenses, distribution, and marketing
expenses. These expenses are usually the ones that, in the largest proportion, are
usually paid through supplier financing. An example of this is the 7 leguas
company.

Next, We have The internal sources of financing are a type of sources

that are created by the enterprise as itself and are the ones that help them to run
by doing it by themselves the money came from the incomes and also can It come
by the partners of the enterprise and this is also known as social capital and this
helps the enterprise to develop into the future and get a bigger income and a
bigger asset.

We have as an example the next internal sources National Treasure,

Financing by own resources, Internal Credit, Liquidations, Refinance of
profits, Amortization.

First We have the national Treasure is an internal source Financing

originating from general income resources. These resources are characterized by
being freely available and free of charge for reimbursement, this excluding internal
this originates from tax levies set by the National State, in order to finance its
expenses without predetermined allocation, constitute the resources of the central
administration originated in tax collection, financial surpluses from the treasury,
available balances from previous years, resources non-tax, those from the sale of
shares and participations, assets and others that enter the treasury, that is, they
are
characterized by being freely available an example of a company that uses this is
telmex, Another method is the Financing by own resources this is internal
source of Financing and it works by an Income collected by units of the General
Government and their companies to finance specific actions of the same, from the
sale of goods or services, the operating income of entities for business purposes,
as well as all those from the sale of assets, collection of rates, rights, financing that
originates as variations of the different types of financial assets and cash balances
of the own income of the institutions of the central administration and those
available from previous years an example of this is the unam or uanl. The next
source is The Internal Credit is an internal source of financing comes from the use
of domestic credit, either in the form of bonds and other debt securities, such as
obtaining loans in the domestic market and liabilities with suppliers and
contractors; as well as the cash balances of bond placement income for the own
company with the objective to increase the assets and incomes of the company
and one example of this company is coppel, after this we have The liquidations
are an internal source of financing that occurs when the companies recover the
cost of the investment, because the provisions or the left put assets goes with the
purpose to be applied directly to the expenses of the company, thereby reducing
profits, there is no outflow of money by paying less taxes and dividends the only
bad side of this form is that the real value of your assets can be lose by a half or 30
percent of the income that you acquire It for and this helps to try to improve and
take a different roll of the company and to ensure to make it go right, an example of
a company that did this is best buy also another one is The refinance of profits
this is one of the most common internal sources, where the shareholders decide
not to distribute their interests, but rather these are invested in the provision of the
enterprise and this due to the established categorization of acquisitions or buildings
or every different type of assets that it can help to the company to get higher
incomes or even more assets at the future and to get more benefits for the
shareholders and an example of this is it could be Grupo Azteca.

and last we have The Amortization Is an Internal Source it corresponds to

the part of the capital returned on a certain date. These types of products are
usually single benefit (they put at our disposal a certain amount of money that we
have required) and multiple consideration, which will be the payments to be made
in the time that we have agreed on the return, refers to repaying a capital,
generally a liability (a loan for example), through the distribution of payments over
time. Although the one-time payment can also be agreed.
 Conclusion

With this being said I think that this work definitely help us to learn and
understand about the different or all the differences that the external and internal
sources has and it also help us to understand what are things the that every type of
source has of difference and also its definition and what are the different type of
enterprises or companies use this or give this service and also in my personal
opinion this really help me because I had to look for information in a lot of places to
understand and type a good definition made by myself and what are the things
they do and how it can be done or even be pay and how many time this got to be
done or have to be able to understand it and help me to have better focus of the
financing sources and what a re the importance of these and what type of source I
can use in a future if I ever required one these type or services
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