This document discusses various sources of finance for entrepreneurship classified based on time period, ownership/control, and source of generation. Sources are categorized as long term (equity shares, retained earnings, debentures), medium term (preference shares, bonds, bank loans) and short term (trade credit, working capital loans, deposits). Owned capital includes equity, preference shares and retained earnings, while borrowed capital comes from financial institutions or public. Internal sources are retained profits and asset sales, while external sources include shares, debentures, loans and deposits. Choosing the right source is important for cost and business feasibility.

1. SUBJECT : ENTREPRENEURSHIP (2181923)
SEM : VIII
TOPIC : SOURCE OF FINANCE
GROUP MEMBERS : 160140119106-(SISODIYA JAY)
160140119108-(SURTI BRIJESH)
160140119109-(SUTHAR BHRUGESH)
160140119111-(TANDEL HARNISH)
160140119113-(THOLIYA SACHIN)

2. • What is finance?
Money used to purchase things the business
needs or want.
• What is a source of finance?
It is a method of getting hold of the money you need.
Sources of finance are the most explored area
especially for the entrepreneurs about to start a new
business. It is perhaps the toughest part of all the
efforts.

3. There are various sources of finance
classified on the basis of :-
• Time period
• Ownership and control and
• Source of generation

4. 1. ACCORDING TO TIME-PERIOD:
Sources of financing a business are classified based
on the time period for which the money is required.
Time period are commonly classified into following
three:
• (i) Long Term Sources of Finance
• (ii) Medium Term Sources of Finance
• (iii) Short Term Sources of Finance

5. (i) LONG TERM SOURCES OF FINANCE
• Share Capital or Equity Shares
• Preference Capital or Preference Shares
• Retained Earnings or Internal Accruals
• Debenture / Bonds
Term Loans from Financial Institutes, Government,
and Commercial Banks
1.Venture Funding Asset Securitization
2.International Financing by way of Euro
Issue, Foreign Currency
3.Loans,ADR, GDR etc.

6. (ii) MEDIUM TERM SOURCES OF FINANCE
• Preference Capital or Preference Shares
• Debenture / Bonds
• Medium Term Loans from Financial
Institutes,Government, and Commercial
Banks

7. (iii) SHORT TERM SOURCES OF
FINANCE
• Trade Credit
• Short Term Loans like Working Capital Loans
from Commercial Banks
• Fixed Deposits for a period of 1 year or less
• Advances received from customers
• Creditors,Payables
• Factoring Services
• Bill Discounting etc.

8. 2. ACCORDING TO OWNERSHIP &
CONTROL:
Sources of finances are classified based on
ownership and control over the business. These two
parameters are an important consideration while
selecting a source of finance for the business. On
the basis of ownership & control sources of finance
are classified into two:
(i) Owned Capital
(ii)Borrowed Capital

9. (i) OWNED CAPITAL
• Equity Capital
• Preference Capital
• Retained Earnings
• Convertible Debentures
• Venture Fund or Private Equity

10. (ii) BORROWED CAPITAL
•Financial institutions,
•Commercial banks or
•General public in case of debentures.

11. 3.ACCORDINGTO SOURCE OF
GENERATION:
According to the source of generation source of
finance are classified into two:-
(i) Internal Sources
(ii) External Sources

12. (i) INTERNALSOURCES
• Retained profits
• Reduction or controlling of
working capital
• Sale of assets etc.

13. (ii) EXTERNAL SOURCES
• Shares
• Debentures
• Public Deposit
• loans

14. CONCLUSION
• Deciding the right source of finance is a crucial
business decision taken by top level finance
managers. Wrong source of finance increase the
cost of funds which in turn would have direct
impact on the feasibility of project under concern.
Improper match of type of capital with business
requirements may go against smooth functioning
of the business.

15. THANK YOU