SUBJECT : PROJECT

MANAGEMENT TOPIC :
SOURCES OF FUND

SUBMITTED TO : DR SHRUTI ARORA

SUBMITTED .BY : NARENDRA YADAV
SUNIL KUMAR SINGH

CONTENT

➢WHY ARE FUNDS NEEDED?

➢WHAT IS SOURCES OF FUNDS?
➢TYPES OF SOURCES OF FUNDS
➢CLASSIFICATION OF SOURCES OF FUNDS
➢CONCLUSION
Why are Funds Needed?

 The quality of the goods and services offered by the business

is greatly affected by the financial situation of the business
 The overall picture of the business starting from its market
position to providing backup services are all destined by the
financial usages that the business has in their capability.

 Funding is the fuel that powers up a business unit.

What is Source of Funds?

For growing their business units, companies seek for sources of

funding. Funding, also known as the financing, is an act to contribute
the resources to finance the project, or an investment.

Sources of Funds Can Be Flowed out From –

 Retained Earnings

 Debt Capital

 Equity Capital

TYPES OF SOURCES OF FUNDS

Retained Earnings
Businesses aim to maximize profits by selling a product or
rendering service for a price higher than what it costs them
to produce the goods.
Debt Capital
Companies obtain debt financing privately through bank
loans. They can also source new funds by issuing debt to
the public.
Equity Capital
Companies can raise funds from the public in exchange for
a proportionate ownership stake in the company in the
form of shares.
Classification Of Sources Of Funds

Based on Period
1. Long-termSources:
 Long-term sources of funds fulfill the needs of any business for a long period that
is for a period exceeding 5 years.

2. Medium-termSources:

The funds which are required for more than one year but less than five years.
These include public deposits, borrowing from banks, lease financing, etc.

3. Short-termSources:

The funds which are required for less than one year is termed short-term sources
of fund.

Based on Ownership
1. Owner’s Funds:
Owner’s funds are those which are provided to the firm by its owners. The owner
can be a sole trader, a shareholder of the company,or a partner.
2. BorrowedFunds:
It is a fund which is borrowed from different financial institutions or raised through
the issue of bonds debentures. Based on the Source of Generation
1. Internal Sources:
Every business organization has some funds which are kept aside for future
uncertainties and needs..
2. External Sources:
When a large amount of funds is required by a business enterprise, then it opts for
external financing.
 CONCLUSION
Business finance is the money a company needs to launch and
maintain its activities.

Retained profits, Loan And Financing and equity financing

make up the primary sources of finance.

Retained earnings from company operations are used by

companies to grow or pay dividends to their stockholders.
THANKYOU