1.

Equity Financing:
o Venture Capital: Involves external investors (venture capitalists) providing funds in
exchange for equity ownership in a startup or growing company. These investors take
on higher risk but also expect substantial returns.
o Angel Investment: Similar to venture capital, but typically involves individual
investors (angels) who invest their personal funds in early-stage companies.
o IPO (Initial Public Offering): The process by which a private company goes public
by offering its shares to the general public on a stock exchange. This allows the
company to raise capital from a wide range of investors.
2. Debt Financing:
o Bank Loans: Companies borrow money from banks or financial institutions and agree
to repay it with interest over a specified period. Common types include term loans
and revolving credit lines.
o Corporate Bonds: Companies issue bonds (debt securities) to raise capital.
Bondholders receive periodic interest payments and the principal amount at maturity.
o Lines of Credit: A flexible form of borrowing where a company can draw funds up to
a predetermined limit. Interest is paid only on the amount used.
3. Hybrid Instruments:
o Convertible Debt: A type of debt that can be converted into equity (usually common
shares) at a later date. It combines features of both debt and equity.
o Mezzanine Financing: A blend of debt and equity financing. Mezzanine lenders
provide capital with the option to convert it into equity if certain conditions are met.
4. Internal Financing:
o Retained Earnings: Profit generated by a company that is reinvested rather than
distributed to shareholders. It serves as a source of internal funding.
o Working Capital Optimization: Efficient management of current assets and liabilities
to improve cash flow and reduce external financing needs.
5. Government and Institutional Financing:
o Grants: Non-repayable funds provided by government agencies, foundations, or
other organizations to support specific projects or initiatives.
o SBA Loans: Loans guaranteed by the U.S. Small Business Administration (SBA) to help
small businesses access capital.
o R&D Tax Credits: Tax incentives offered to companies engaged in research and
development activities.
6. Trade Financing:
o Supplier Credit: When suppliers allow buyers to delay payment for goods or services
received.
o Invoice Factoring: Companies sell their accounts receivable (invoices) to a third party
(factor) at a discount to obtain immediate cash.
o Trade Credit Insurance: Protects businesses against non-payment by customers due
to insolvency or other reasons.
o Bank Letters of Credit (LCs): Financial instruments that guarantee payment to
suppliers when certain conditions are met.
o Bank Letters of Guarantee (LGs): Similar to LCs but used for non-financial
obligations (e.g., performance guarantees).
7. Strategic Alliances and JVs:
o Strategic Investment: Companies collaborate with other firms through alliances or
joint ventures (JVs) to achieve mutual goals. Investment may involve equity stakes or
shared resources.
8. Off-Balance Sheet Financing:
o Operating Leases: Leasing assets (e.g., equipment, property) without recording them
as liabilities on the balance sheet. Payments are treated as operating expenses.
o Special Purpose Vehicles (SPVs): Legal entities created to hold specific assets or
manage risks, often used in complex financing structures.
9. Asset-Based Financing:
o Sale and Leaseback: A company sells an asset (e.g., real estate) to raise capital and
then leases it back from the buyer.
o Inventory Financing: Using inventory as collateral to secure loans or credit lines.
10. Foreign Exchange and Hedging:
o Interest Rate Swaps: Agreements where parties exchange fixed and floating interest
rate payments to manage interest rate risk.
o Currency Swaps & Forwards: Derivatives used to hedge against currency exchange
rate fluctuations in international transactions.
11. Equity Financing:
o Venture Capital: Funding provided by investors to startup companies
and small businesses that are believed to have long-term growth
potential.
o Angel Investment: Investment from affluent individuals who provide
capital for a business start-up, usually in exchange for convertible debt
or ownership equity.
o IPO (Initial Public Offering): Process through which a private company
becomes a public company by selling shares of its stock to the general
public for the first time.
12. Debt Financing:
o Bank Loans: Borrowing money from a bank with an agreement to repay
the principal amount plus interest over a specified period.
o Corporate Bonds: Debt securities issued by corporations to raise
capital, typically with a fixed interest rate and maturity date.
o Lines of Credit: Pre-approved borrowing limit extended by a bank or
financial institution to a customer, allowing them to access funds as
needed.
13. Hybrid Instruments:
o Convertible Debt: Debt that can be converted into equity shares in the
company at a predetermined price or upon certain events.
 o Mezzanine Financing: A hybrid of debt and equity financing that gives
the lender the right to convert to an ownership or equity interest in the
company in case of default.
14. Internal Financing:
o Retained Earnings: Profits that are reinvested into the company rather
than being distributed to shareholders as dividends.
o Working Capital Optimization: Managing current assets and liabilities
to ensure efficient use of capital and liquidity.
15. Government and Institutional Financing:
o Grants: Non-repayable funds provided by government agencies,
foundations, or other organizations to support specific projects or
activities.
o SBA Loans: Loans guaranteed by the U.S. Small Business Administration
to help small businesses access financing with favorable terms.
o R&D Tax Credits: Tax incentives provided by governments to
encourage investment in research and development activities.
16. Trade Financing:
o Supplier Credit: Credit extended by suppliers to buyers allowing them
to defer payment for goods or services received.
o Invoice Factoring: Selling accounts receivable to a third-party (factor)
at a discount to access immediate cash.
o Trade Credit Insurance: Insurance that protects businesses against the
risk of non-payment by customers for goods or services delivered on
credit terms.
o Bank Letter of Credit (LCs): A letter issued by a bank guaranteeing
payment to a seller provided specified terms and conditions are met.
o Bank Letter of Guarantee (LGs): A written commitment from a bank
ensuring that the liabilities of a debtor will be met.
17. Strategic Alliances and JVs (Joint Ventures):
o Strategic Investment: Investment made in a company with the intent
of gaining strategic advantages such as access to new markets,
technologies, or capabilities.
18. Off-Balance Sheet Financing:
o Operating Leases: Leases that do not meet the criteria to be classified
as capital leases, thus keeping the leased asset and associated liabilities
off the balance sheet.
o Special Purpose Vehicles (SPVs): Legal entities created for a specific
purpose, often used to isolate financial risk or to facilitate complex
financial transactions.
19. Asset-Based Financing:
 o Sale and Leaseback: Selling an asset to a buyer who then leases it back
to the seller, allowing the seller to retain use of the asset while freeing
up capital.
o Inventory Financing: Using inventory as collateral to secure a loan or
line of credit.
20. Foreign Exchange and Hedging:
o Interest Rate Swaps: Financial derivatives used to exchange interest
rate cash flows between two parties, typically to manage interest rate
risk.
o Currency Swaps & Forwards: Agreements between parties to
exchange one currency for another at a future date at a predetermined
exchange rate, used to hedge against currency risk.