This document classifies sources of finance according to period, ownership, source, and mode of finance. Short-term sources include bank credit, trade credit, and commercial paper. Long-term sources are shares, debentures, and loans. According to ownership, sources are either owned capital like shares and retained earnings, or borrowed capital like debentures and bank loans. Internal sources come from retained earnings, while external sources are debentures, loans, and deposits. Sources can also be classified as security financing like shares and debentures, or loan financing such as bank loans.

1. Sources of Finance

2. Classification of sources
According to
period
Short-term
sources
Long-term
Sources
According to
ownership
Owned
capital
Borrowed
capital
According to
source
Internal
sources
External
sources
According to
mode of
finance
Security
financing
Loan
financing

3. According to Period
Short Term
Bank credit
Customer
advances
Trade credit
Factoring
Deferred incomes
Commercial paper
Long Term
Shares
Debentures
Loans
Retained Earnings

4. Shares
Equity shares
Deferred shares
No par shares
Preference shares
Cumulative & non-cumulative
Redeemable & irredeemable
Participative & non-participative
Convertible & non-convertible

5. Characters
Equity shares
 Maturity
 Claim on assets
 Voting rights
 Pre-emptive rights
 Limited liability
Preference shares
 Maturity
 Claims on income
 Claims on assets
 Control
 Hybrid form of securities

6. Debentures
 Simple or unsecured
debentures
 Secured or mortgaged
debentures
 Bearer debentures
 Registered debentures
 First & second
debentures
 Redeemable debentures
 Irredeemable debentures
 Convertible debentures
 Zero Coupon debentures
 Guaranteed debentures
 Collateral Debentures

7. Features
Maturity
Claims on income
Claims on assets
Control
Call feature

8. Difference between shares & debentures
 Nature (capital or debt)
 Return
 Rate of return
 Charges again P&L or appropriation a/c
 Voting rights
 Redemption
 Treatment at the time of liquidation

9. Classification of sources
According to
period
Short-term
sources
Long-term
Sources
According to
ownership
Owned
capital
Borrowed
capital
According to
source
Internal
sources
External
sources
According to
mode of
finance
Security
financing
Loan
financing

10. According to Ownership
Owned Capital
 Equity shares
 Deferred shares
 No par shares
 Retained Earnings
Borrowed capital
 Debentures
 Loans from banks
 Loans from FI

11. Classification of sources
According to
period
Short-term
sources
Long-term
Sources
According to
ownership
Owned
capital
Borrowed
capital
According to
source
Internal
sources
External
sources
According to
mode of
finance
Security
financing
Loan
financing

12. According to Source
Internal
 Retained Earnings
 Right shares
 Bonus shares
External
 Debentures
 Loans
 Factoring
 Public deposits
 Commercial papers

13. Classification of sources
According to
period
Short-term
sources
Long-term
Sources
According to
ownership
Owned
capital
Borrowed
capital
According to
source
Internal
sources
External
sources
According to
mode of
finance
Security
financing
Loan
financing

14. According to Source of finance
Security
 Shares
 Debentures
 Commercial papers
Loan
 Loans from Banks
 Loans from FI
 Customer advances
 Trade credit
 Factoring

15. Other Sources
Lease Financing
 Operating lease
 Financial Lease
 Sale and lease back
Venture Capital Financing
 Early stage financing
 Expansion financing
 Buyout financing
Hire Purchase Financing
Installment purchase
Sale of assets

16. Foreign Sources
Depository Reciepts