Professional Documents
Culture Documents
PRESENTED BY
1. BIRAJ BOSE (18)
2. ARCHIT PATTNAIK (09)
3. AMAN GUPTA (06)
4. MANAV MOHANTY (34)
5. SRISA BEHERA (48)
1
Introduction
2
Sources of Finance
Traditional Sources of
Finance
Public Deposits
3
Long term Financing - Meaning & Purpose
Long term financing is a form of financing that is provided for a period of more
than a year. Long term financing is also known as Fixed Capital Finance. Below
are the purpose for which long term finance is availed:
➔ Expansion of companies
➔ Increasing facilities
➔ Construction of projects on a large scale
➔ Acquisition of companies
4
Sources of Long Term Finance - Security
Financing
● Shares: These are issued to the general public. These may be of two types:
Equity shares - Such a shareholder has to share the profits and also bear the losses incurred by the
company. Equity shareholders are regarded as the real owners of the company.
Preference shares - A share which entitles the holder to a fixed dividend, whose payment takes
priority over that of ordinary share dividends.
● Public Deposit: It implies any money received by a company through the deposits or loans
collected from the public. 5
Sources of Long Term Finance - Internal
Financing
Retained Earnings: The company may not distribute the whole of its profits
among its shareholders. It may retain a part of the profits and utilize it as capital
for further long term activities.
6
Sources of Long Term Finance - Loan
Financing
Term Loans from Banks: Many industrial development banks, cooperative banks
and commercial banks grant medium term loans for a period of 3-5 years for
supporting the long term capital investments by the company viz., purchase of
Fixed Assets, expansion etc
Short Term Business Finance are required to meet its day to day expenses. It
enables continuous availability of liquid cash to meet day to day expenses. It is
also known as Working Capital Finance. The purpose of short term business
finance is as below:
Trade credit - Trade credit refers to credit granted to manufacturers and traders
by the suppliers of raw material, finished goods, components, etc
Instalment credit - Only a small amount of money is paid at the time of delivery of
such articles. The balance is paid in a number of instalments. Interest is charged
by the supplier for extending credit. 10
Reshuffling the earlier chart
Traditional Sources of Finance
Modern days the ways have changed as to how Startups and established business
are sourcing funds for business. Below are the unconventional sources of Finance:
● Angel Investment
12
Angel Investment
Sanjay Mehta, an Angel Investor has invested in several startups viz., OYO Rooms,
FabAlley, OrangeScape etc.
13
Venture Capital (VC)
14
Private Equity (PE)
Private equity consists of investors and funds that make investments directly into
private companies or conduct buyouts of public companies that result in a
delisting of public equity. Capital for private equity is raised from retail and
institutional investors, and can be used to fund new technologies
Justdial, the local search engine was funded by Private Equity Investors like
Sequoia Capital and SAP Ventures.
15
THANK YOU
16