Tuesday, July 15, 2014

What are the long term sources of finance?

What are the long term sources of finance?
A business requires funds to purchase fixed assets like land and building, plant and machinery, furniture etc. These assets may be regarded as the foundation of a business. The capital required for these assets is called Fixed capital. A part of the working capital is also of a permanent nature. Funds required for this part of the working capital and for fixed capital is called long term finance. Various sources of long term finance are:
1. Capital Market which includes stock market and bond market.
2. Financial Institutions like IDBI, ICICI
3. Investment institutions like mutual funds, UTI
4. Leasing through banks or other sources
5. Foreign institutions like World Bank
6. By making collaborations with foreign companies
7. From NRI's (Non Resident Indians)
8. Retained profits

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