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1. SOURCES OF LONG
TERM FINANCE
GROUP 10
SUBJECT - FINANCIAL MANAGEMENT

2. TEAM
• Nidhi Jambavalikar
• Nelson Michael
• Muzna Shaikh
• Mihir Kothawale
• Siddesh Chaudhari

3. LONG TERM SOURCES OF FINANCE
LONG-TERM FINANCE SOURCES ARE THOSE FROM WHICH
FUNDS ARE RAISED FOR A LONGER PERIOD OF TIME,
USUALLY MORE THAN A YEAR. LONG-TERM FUNDING IS
NECESSARY FOR BUSINESS OPERATIONS
MODERNIZATION, EXPANSION, DIVERSIFICATION, AND
DEVELOPMENT.

4. SOURCES OF LONG TERM FINANCE
• Finance Equity Shares Preference Shares
• Debentures
• Loans From Banks And Financial Institutions
• Venture Capital Financing
• Term Loan

5. EQUITY SHARES
ADVANTAGES
• Source of fixed capital
• No obligation for repayment
• Small nominal value such as Rs.10
• Voting power
• Right to new shares
DISADVANTAGES
• High risk
• Due to pre-emptive right management
of the co. may be concentrated in few
hands
• No trading on equity

6. PREFERENCE SHARES
Advantages
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Disadvantages
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7. Debentures Types of Debentures
• Naked or simple
• secured or mortgaged
• Redeemable and irredeemable
• Convertible and non convertible
• Registered and bearer
• Debentures First and second
debentures

8. DISADVANTAGES
ADVANTAGES
• No voting rights
• Fixed interest
• Debenture interest is an
expense to the co.
• Can be redeemed
• Trading on equity is
possible
• Interest is an obligation to
the company
• Create a charge on
company's assets
• Common people can not
buy debentures as they
are of high denominations

9. LOANS FROM BANKS AND FINANCIAL INSTITUTIONS
LOANS FROM BANKS AND FINANCIAL INSTITUTIONS ARE WHEN YOU
BORROW MONEY FROM THEM, AND YOU PROMISE TO PAY BACK THAT
MONEY OVER TIME WITH SOME EXTRA AMOUNT CALLED "INTEREST." THE
LOAN CAN BE FOR PERSONAL NEEDS, BUYING A HOUSE OR CAR,
STARTING A BUSINESS, OR PAYING FOR EDUCATION.

10. DISADVANTAGES
• Interest payments raise the overall cost.2
• The debt burden and the danger of default
• The effect on one's credit score.
• Other fees and charges.
• Secured loans demand collateral. (Security
Deposit)
• Limited loan term flexibility .
ADVANTAGES
• Access to capital
• Flexible repayment options.
• Building credit history
• Lower interest rates
• Fixed interest rates.
• Improved cash flow

11. VENTURE CAPITAL
It is often used for growth and expansion of new and young enterprises.
Generally considered as high risky capital. Venture capitalist will involve in
the management of the enterprise. They generally support to proven
technologies.

12. PROCESS OF VENTURE FINANCING
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13. Conditions of venture capital
According to Govt. of India
• Total investment should not exceed Rs.100 millions
• New companies which incorporate some significant
improvement over the existing one's in India
• Should have qualified professionals

14. A term loan is granted on the basis of a formal
agreement between the borrower and the
lending institution on the basis of an asset as a
security for a fixed period of time. In India
commercial banks and specialized financial
institutions like IDBI, ICICI, IFC, etc are
providing term loans.
TERM LOAN

15. CONDITIONS OF TERM LOAN LENDING
• Conditions of term loan lending
• An asset as a security Minimum working capital.
• There will not be any additional debt management
should be effective