Uses of Funds


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The Uses of Funds schedule needed for a Business Plan and/or Projections and/or Forecasts should be a straightforward, one to two page document completed in Excel. For Business Plans that have multiple phases or expansions that require phased or tiered investment, additional Use of Funds schedules, or a single schedule with columns for Phase I, Phase II, etc., should be utilized. When completing Forecasts, let alone Uses of Funds, it is imperative to structure these documents in one file with multiple worksheets so they can be easily edited to suit the needs and expectations of individual investors or institutions

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Uses of Funds

  1. 1. uses of funds
  2. 2. Savings Accounts: Short term – An example of a very short-term savings account (6 months-one year), could be a money market mutual fund or income fund. Midterm – An example of a mid- term savings account (2- 3 years) could be an income -equity fund. Long- term – An example of long-term (greater than 3 years) could be a growth or growth and income mutual fund. Very long-term – an example of very long term, (five years or more) are growth, growth and appreciation, growth and income, and international funds.
  3. 3. Retirement accounts: Retirement accounts are long-term accounts, so examples of mutual fund types appropriate for these accounts would be growth, growth appreciation, international, growth and income or a combination of these funds. College Plans: The fund choices will be similar to retirement funds. Many mutual fund companies have specific college funds. It is best to start saving for college when your children are babies. Mutual funds work best when held long term
  4. 4. LENDING TO GOVERNMENT Treasury notes Short-term discount securities issued by the Commonwealth Government. Treasury bonds Medium- to longer-term securities issued by the commonwealth government that pay a specified interest coupon stream State government debt securities Low risk and low return
  5. 5. PERSONAL FINANCE: •Housing finance •Mortgage •Amortized loan •Investment property •Fixed-term loan •Credit card •Other bank assets (e.g. infrastructure, shares in controlled entities)
  6. 6. COMMERCIAL LENDING: • • • • • • • •    Fixed-term loan A loan with negotiated terms and conditions Period of the loan Interest rates Fixed or variable rates set to a specified reference rate Timing of interest payment Repayment of principal Your subtopic goes here Overdraft Bank bills held leasing
  7. 7. Sources of funds
  8. 8. Money Market Scheme: Money Market Funds are among the safest and most stable. These funds invest in short term debt instruments such as Treasury bills and bank deposits. Income Scheme: These funds focus on providing investors with a steady stream of fixed income. They invest in short term and long term debt instruments like TFCs, government securities like T-bills/ PIBs, or preference shares. Aggressive Fixed Income Scheme: The aim of aggressive income fund is to generate a high return by investing in fixed income securities while taking exposure in medium to lower quality of assets also.
  9. 9. Asset Allocation Fund: These Funds may invest its assets in any type of securities at any time . Fund of Fund Scheme: Fund of Funds are those funds, which invest in other mutual funds. Shariah Compliant (Islamic) Scheme: Islamic funds are those funds which invest in Shariah Compliant securities i.e. shares, Sukuk, Ijara sukuks etc.
  10. 10. Index Tracker Scheme: Index funds invest in securities to mirror a market index, such as the KSE 100. An index fund buys and sells securities in a manner that mirrors the composition of the selected index. Capital Protected Scheme: In this type of scheme, the payment of original investment is guaranteed with any further capital gain which may accrue at the end of the contractual term of the Fund . Such funds are for a specific period.