This document provides an overview of various asset and fund-based financial services. It discusses topics like lease finance, consumer credit, factoring, bills discounting, and housing finance. For lease finance, it defines different types of leases and outlines the steps involved in a leasing transaction. It also covers hire purchase agreements and compares leasing to hire purchase. The document then discusses factoring, defining it and outlining the key functions performed by factoring companies. It concludes with a brief discussion of bills discounting.
Hire Purchase System
The process of Hire Purchase
Features of Hire Purchase
Advantages and Disadvantages of Hire Purchase
Contents of Hire Purchase agreement
Installment Purchase
Important Definitions
Difference between Hire Purchase and Installment Purchase
Difference between Sales and Hire Purchase
Lease
Features of Lease
Merits and Demerits of Lease
Difference between Hire Purchase and Lease
Hire Purchase System
The process of Hire Purchase
Features of Hire Purchase
Advantages and Disadvantages of Hire Purchase
Contents of Hire Purchase agreement
Installment Purchase
Important Definitions
Difference between Hire Purchase and Installment Purchase
Difference between Sales and Hire Purchase
Lease
Features of Lease
Merits and Demerits of Lease
Difference between Hire Purchase and Lease
Hi friends,
It may be usefull for understanding the AS 14 and if any changes or clarifications required contact with email ID given belove - venki143b@gmail.com
Thanks & Regards
VENKANNA SETTY
In forfaiting, exporters sell their trade receivables from the importers to a third party. This means that the exporters exchange their trade receivables with a third party for cash.
To know more about it, click on the link given below:
https://efinancemanagement.com/financial-accounting/forfaiting
Hi friends,
It may be usefull for understanding the AS 14 and if any changes or clarifications required contact with email ID given belove - venki143b@gmail.com
Thanks & Regards
VENKANNA SETTY
In forfaiting, exporters sell their trade receivables from the importers to a third party. This means that the exporters exchange their trade receivables with a third party for cash.
To know more about it, click on the link given below:
https://efinancemanagement.com/financial-accounting/forfaiting
This PPT provide a huge information about services support process. In this PPT I described all steps of services support process from the beginning to end.
Venture capital in India is a big action by the Indian government in the term of industry development. Venture capital having more problem and also denoted what will be scenario of Venture capital in future !!
Collection of Mergers and Acquisitions and Integration case histories from my first-hand experiences at GE, Fiat, Indesit, Corus, Areva, with lessons learned
Venture Capital Unlocked (Stanford) / Venture Capital 2.0Dave McClure
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slides for my "Venture Capital 2.0" opening talk at Stanford School Continuing Studies, VC101 class "Venture Capital Unlocked" #VCunlocked #500startups
This ppt is covering lease finance in detail, covering advantages & disadvantages. Types of lease. Instead of doing hard work rely on smart work. Time you devote on copy pasting. Channelize that time in understanding topic via reading it.
Leasing and hire purchase are both financial arrangements.Sonam704174
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Leasing and hire purchase are both financial arrangements for acquiring assets. Leasing involves renting an asset for a specified period, while hire purchase allows the buyer to use the asset during the payment period with ownership transferring after the final installment.
How to get verified on Coinbase Account?_.docxBuy bitget
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t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
What website can I sell pi coins securely.DOT TECH
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Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
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There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
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Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
where can I find a legit pi merchant onlineDOT TECH
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Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
how to sell pi coins in all Africa Countries.DOT TECH
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Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
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Pi coins is not launched yet in any exchange đą this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAYÂ you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers âĨī¸
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how can i use my minded pi coins I need some funds.DOT TECH
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If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. đ I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Exploring Abhay Bhutadaâs Views After Poonawalla Fincorpâs Collaboration With...beulahfernandes8
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The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
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Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
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The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
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We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
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USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
What price will pi network be listed on exchangesDOT TECH
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The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ â 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
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Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
how to sell pi coins at high rate quickly.DOT TECH
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Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
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As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
3. AssetFund based financial services
īLease finance.
īConsumer credit and hire purchase finance.
īFactoring definition.
īFunctions.
īAdvantages.
īEvaluation and forfeiting.
īBills discounting.
īHousing finance.
īVenture capital financing.
īFee-basedadvisory services: stock broking, credit rating.
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4. Lease finance
īConcept of leasing:
īLeasing, as a financing concept is an arrangement between
two parties, the leasing company or lessor and the user
lessee, where by the former arranges to buy capital
equipment for the use of the latter for an agreed period of
time in return for the payment of rent.
īThe rentals are predetermined and payable at fixed
intervals of time, according to the mutual convenience of
both the parties.
īHowever, the lesser remains the owner of the equipment
over the primary period
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5. A lease is defined as follows
ī-dictionary of business and managementīLease is a form of contract transferring the use or
occupancy of land, space, structure or equipment, in
consideration of payment, usually in the form of a
rent.
īâJames c.van horne-
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6. Leasing as a source of finance
ī Leasing is an important source of finance for the
lessee.
ī Leasing companies finance for:
1. Modernization of business.
2. Balancing equipment.
3. Cars, scooters and other vehicles and durables.
4. Items entitled to 100% or 50% depreciation.
5. Assets which are not being financed by
banks/institutions.
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7. ī
1.
2.
3.
ī
The steps involved in leasing transaction are
summarized as follows:
First, the lessee has to decide the asset required and
select the supplier he has to decide about design
specifications, the price , warranties, terms of
delivery, servicing etc.
The lessee, then enters into a lease agreement with
the lessor.
The lease agreement contains the terms and
conditions of the lease such as
(a) the basic lease period during which the lease
irrecoverable.
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8. (b) the timing in the amount of periodical enter payments
during the lease period.
(c) details of any option to renew the lease or to purchase
the asset at the end of the period.
(d) details regarding payment of cost of maintenance and
repairs, taxes, insurance, and other expenses.
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9. 3.
After the lease agreement is signed the lessor
contacts the manufacturer and requests him
to supply the asset to the lessee. The lesser
makes payment to the manufacturer after
the asset has been delivered and accepted
by the lessee.
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10. TYPES OF LEASE
DIFFERENCES BETWEEN FINANCIAL LEASE AND OPERATING LEASE
ī FINANCIAL LEASE:
1. A financial lease is like an
2.
installment loan. It is a legal
commitment to pay for the
entire cost of the equipment
plus interest over a specified
period of time. The lessee
with commits to a series of
payment which in total
exceed the cost of the
equipment.
It excludes provisions for
maintenance or taxes which
are paid separately by the
lessee.
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īOPERATING LEASE:
1. An operating lease is a rental
agreement. The lessee is not
committed to paying more
than the original cost of
equipment during contractual
period.
2. It provides for maintenances
expenses and taxes of the
lesser.
11. 1.
2.
3.
4.
5.
The risk of obsolescence
is assumed by the lessee.
Contract period ranges
from medium to long
term.
Contracts are usually
non cancelable.
Air crafts land and
building heavy
machinery are leased.
The lesser fulfills
financial function
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1. Leasing company assumes
risk of obsolescence.
2. Contract period ranges
from intermediate to short
term.
3. Contracts are usually
cancelable either by the
lesser / by the lessee.
4. Computers, office
equipments,
automobiles ,etc., are
leased.
5. The lesser fulfills service
function.
12. Leverage lease
īA leverage lease is used for financing those assets which
require huge capital outlay.
īThe outlay for purchase cost of the asset generally varies from
Rs.50 lakhs to Rs.2 crore and has economic life of 10 years or
more.The leverage lease agreement involves three parties, the
lessee, the lessor and the lender.The lessor acquires the assets
as per the terms of the lease agreement but finances only a
part of the total investment, say 20% to 50%.
īThe balance is provided by a person or a group of persons in
the form of loan to the lessor.
īIn leveraged lease, a wide range of equipments such as rail
road, rolling stock, coal mining, electricity generating plants,
pipe lines, ships etc. are acquired.
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13. Sale and lease back
ī Under this type of lease, a firm which has an asset sells it to the leasing
company and gets it back on lease.
ī The asset is generally sold at its market value.
ī The firm receives the sale price in cash and gets the right to use the asset
during the lease period.
ī The firm makes periodical rental payment to the lessor.
ī The title to the asset vests with the lessor.
ī Most of the lease back agreements are on a net-net basis which means that the
lessee pays all maintenance expenses, property taxes and insurance.
ī In some cases, the lease agreement allows the lease to repurchase the property
at the termination of lease.
ī The sale and lease back agreement is beneficial to both lessor and lessee. The
lessor gets immediate cash which becomes available for working capital or for
further expansion and lessor gets tax benefits.
ī Retail stores, office buildings, multipurpose industrial building and shopping
centres are financed under this method.
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14. Instalment buying ,Hire purchase
and leasing
īIn installment buying, the property passes on to the buyer
immediately as soon as the first installment is made.
īThe balance amount is payable in installments.
īUnder the contract of installment the buyer has no right to
return the goods.
īIn case of default, the seller has the right to file a suit in
the court of law to recover his dues.
īHire purchase is an agreement under which the owner
delivers the goods to the buyer who agrees to make
periodical payment as hire charges.
īThe possession of goods vests with the hirer but the
ownership remains with the seller.
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15. īOn full payment of hire charges, the buyer gets
the option of purchasing the goods.
īOn default, the seller can reclaim the goods,
subject to certain provisions of Hire Purchase Act.
īHire purchase resembles leasing in certain ways.
īIn both the cases the right to use the equipment is
transferred to the hirer/lessee.
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16. Advantages of Lease
īPermit Alternative Use of Founds
īFaster and Cheaper Credit
īFlexibility
īFacilitates Additional Borrowings
īProtection against obsolescence
īNo Restrictive Covenants
īHundred Percent Financing
īBoon to Small Firm
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17. Disadvantages of Leasing
īLease is not suitable mode of project finance.
īThis is because rentals are repayable soon after entering
into lease agreement while in new projects cash
generations may start only after a long gestation period.
īCertain tax benefits/incentives such as subsidy may not be
available on leased equipment.
īThe value of real assets such as land and building may
increase during lease period.
īIn such a case the lessee loses the advantage of a potential
capital gain.
īThe cost of financing is generally higher than that of debt
financing.
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18. īA manufacturer who wants to discontinue a particular line
of business will not in a position to terminate the contract
except by paying heavy penalties. If it is a owned asset the
manufacturer can sell the equipment at his will.
īIf the lessee is not able to pay rentals regularly, the lessor
would suffer a loss particularly when the asset is a
sophisticated one and less liquid.
īIn case of lease agreement, it is lessor who has purchased
the asset from the supplier and not the lessee. Hence, the
lessee by himself is not entitled to any protection in case
the supplier commits breach of warranties in respect of the
leased assets.
īIn the absence of exclusive laws dealing with the lease
transaction, several problems crop up between lessor and
lessee resulting in unnecessary complications and
avoidable tension.
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19. īThe lease agreement specifies the legal rights and
obligation of the lessor and the lessee.
īIt typically contains terms relating to the folowing:
īDescription of the lessor, the lessee, and the equipment.
īAmount, time, and place of lease rental payments.
īTime and place of equipment delivery.
īLesseeâs responsibility for taking delivery and possession of
the leased equipment.
īLesseeâs right to enjoy the benefits of the warranties
provided by the equipment manufacturer/supplier.
īInsurance to be taken by the lessee on behalf of the lessor.
īVariation in lease rentals if there is a change in certain
external factors like bank interest rates, depreciation rates,
and fiscal incentives.
īOption of equipment on expiry of the lease period.
īArbitration procedure in the event of dispute.
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20. Structure Of Leasing Industry
ī The present structure of leasing industry in India consists of
ī (i) Private Sector Leasing and
ī (ii) Public Sector Leasing.
ī The private setor leasing consists of :
ī (i) Pure Leasing Companies,
ī (ii) Hire Purchase and Finance Companies,and
ī (iii) Subsidiaries of Manufacturing Group Companies.
ī The public sector leasing organisations are divided into:
ī (i) Leasing divisions of financial intitutions,
ī (ii) Subsidiaries of public sector banks, and
ī (iii) Other public sector leasing organisations.
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21. Hire Purchase
īHire purchase is a method of selling goods.
īIn a hire purchase transaction the goods are let out on hire by
finance company (creditor) to the hire purchase customer (hirer).
īThe buyer is required to pay an agreed amount in periodical
installments during a given period.
īThe ownership of the property remains with creditor and passes
on to hirer on the payment of last installment.
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22. FEATURES OF HIRE PURCHASE
AGREEMENT:
īUnder hire purchase system, the buyer takes possession of
goods immediately and agrees to pay the total hire
purchase price in installment.
īEach installment is treated as hire charges.
īThe ownership of the goods passes from buyer to seller on
the payment of the installment.
īIn case the buyers makes any default in payment of any
installment the seller has right to repossess the goods from
the buyer and forfeit the amount already received treating
it as hire charge.
īThe hirer has the right to terminate the agreement any
time before the property passes. Then, he has the option to
return the goods in which case he need not pay
installments falling due thereafter. However, he can not
recover the sums already paid as such sums legally
represent hire charge on goods in question.
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23. HIRE PURCHASE AGREEMENT
ī
ī
1.
2.
3.
4.
There is no prescribed form for a hire purchase
agreement, but it has to be in writing and signed by
both parties to the agreement.
A hire purchase agreement must contain the following
particulars;
The description of goods in a manner sufficient to
identify them.
The hire purchase price of the goods.
The date of commencement of the agreement.
The no. of installments in which hire purchase price is
to be paid, the amount, and due date.
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24. HIRE PURCHASE AND LEASING
Hire purchase is also different from leasing:
i.
Ownership.
ii. Method of financing.
iii. Depreciation.
iv. Tax benefits.
v.
salvage value.
vi. Deposit.
vii. Rent-purchase.
viii. Extent of finance.
ix. Maintenance.
x.
Reporting.
ī
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25. BANK CREDIT FOR HIRE PURCHASE
BUSINESS
ī
ī
The subsidiary of commercial banks lend to the dealer or to finance
intermediary who has already financed articles sold by the dealer to
the hirer under a hire purchase contract.
When offered this type of business, bank subsidiary would make an
assessment of the standing and financial position of the dealer or of
the hire-purchase company, and take into consideration the
principles of good lending and carry out the procedure below:
Customer
3. Amount
5. Repayment
7. Monitoring and control.
1.
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2.Purpose
4.period
6.security
26. FACTORING DEFINITION
īFactoring:
A lot of working capital is tied up in the form of trade
debts. collection of debts, especially for the small âscale
and medium-scale companies is the biggest problem.
The average collection period has been on the increase.
Delays in collection process in turn lead to liquidity
problems and consequently to delay in production and
supplies.
The increase in cost of capital reduces profit and
competitiveness of a company particularly the small ones
in the market.
Ultimately, the small unit may become even sick. To
overcome this situation, the factoring services has been
conceived.
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27. īMEANING:
The word `factor` has been derived from Latin word
`facere` which means to make or to do. In other words it is
`to get things done. According to the Webster dictionary
`factor is an agent, as a banking or insurance company,
engaged in financing the operations of certain companies
or in financing wholesale or retail trade sales, through the
purchase of account receivables. Thus, factoring is
method of financing where by a company sells its trade
debts at a discount to a financial institution.
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28. DEFINITION
īRbert W. johnson in his books `financial managements`
states âfactoring is a service involving the purchase by a
financial organization, called a factor, of receivables owned
to manufactures and distributors by their customers, with
the factor assuming full credit and collection
responsibilitiesâ.
īAccording to V.A. Avadhani, âfactoring is a service of
financial nature involving the conversion of credit bills
into cashâ.
īIn the words of kohok, factoring is an asset based means of
financing by which the factor buys up the book debts of a
company on a regular basis, paying cash down against
receivables, and then collects the amount from the
customers to whom the company has supplied goods.
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29. FUNCTIONS
ī
1.
2.
3.
4.
5.
As stated earlier the term `factoring` simply refers to
the process of selling trade debts of a company to a
financial institution. But, in practice, it is more than
that. Factoring involves the following functions:
Purchase and collection of debts.
Sales ledger management.
Credit investigation and undertaking of credit risk.
Provision of finance against debts, and
Rendering consultancy services.
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30. DICOUNTING
īGenerally, a trade bill arises out of a genuine
credit trade transaction. The supplier of goods
draws s bill on the purchaser for the invoice price
of the goods sold on credit. It is drawn for short
period of 3 to 6 months and in some cases for 9
months.
īThe buyer of goods accept the same and binds
himself liable to pay the amount on the due date.
In such cases, the suppliers of goods has to wait
for expiry of the bills to get back the cost of the
goods sold.
īIt involves locking up of his working capital which
is very much needed for smooth running of the
business or carrying on the normal production
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process.
31. BILLING FINANCING
Bill financing is superior to the conventional and
traditional system of cash credit in many ways.
īFirst of all, it offers high liquidity, in the sense,
funds could be recycled promptly and quickly
through rediscounting.
īIt offers quick and high yield. The bankers gets
income in the form of discount charges at the time
of discounting the bills.
īAgain, there is every opportunity to earn the
spread between the rates of discount and
rediscounts.
īMoreover, bills drawn by business people would
never be dishonored and they are not subject to
any fluctuations in their values.
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ī
32. īCumbersome procedures to create the security
and positive obligations to maintain it are
comparatively very fewer
īEven if the bills is dishonored, there is a simple
legal remedy. The bankers has to simply note and
protest the bill and debit the customer's account.
Bills are always drawn with recourse and hence, all
the parties on the instrument are liable till the bill
is finally discharged.
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33. VENTURE CAPITAL FINANCING
īMEANING OF VENTURE CAPITAL:
Venture capital is long-term risk capital to finance high
technology projects which involve risk but at the same
time has strong potential for growth.
Venture capitalist pool their resources including
managerial abilities to the assist new entrepreneur in the
early years of the project.
Once the project reaches the stage of profitability, they sell
their equity holdings at high premium.
īDEFINITION OF VENTURE CAPITAL COMPANY :
A venture capital company is defined as âa financing
institution which joins an entrepreneur as a co-promoter
in a project and shares the risks and rewards of the
enterpriseâ.
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34. Features of venture capital
Some of the features of venture capital financing are as
under:
1.
Venture capital is usually in the form of an equity
participation. It may also take the form of convertible
debt or long term loan.
2. Investment is made only in high risk but high growth
potential projects.
3. Venture capital is made only for commercialization of
new ideas.
4. Venture capitalist joins the entrepreneur as a copromoter in projects and share the risk and rewards of
the enterprise.
5. There is continuous involvement in business after
making an investment by the investor.
6. Venture capital is not just injection of money but also an
input needed to set-up the firm, design its marketing
strategy and organise and manage it.
7. Investment is usually made in small medium scale
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ī
35. SCOPE OF VENTURE CAPITAL
ī Venture capital may take various forms at
different stages of the project. There are four
successive stages of development:
1. Development of an idea-seed finance.
2. Implementation stage-start up finance.
3. Fledging stage-additional finance.
4. Establishment stage-establishment finance.
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36. IMPORTANCE OF VENTURE CAPITAL:
It is of great practical value to every corporate
enterprise in modern times.
ī
1.
2.
3.
ADVANTAGES TO INVESTING PUBLIC:
The investing public will be able to reduce risk
significantly against unscrupulous management, if the
public invest in venture fund who in turn will invest in
equity of new business.
Investors or have no means to vouch for the
reasonableness of the claims made by promoters about
profitability of the business.
The investors do not have any means to ensure that the
affairs of the business are conducted prudently. The
venture fund having representatives on the board of
directors of the company would overcome it.
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38. CREDIT RATING
MEANING OF CREDIT RATING:
To understand the meaning of credit rating, let us look
at some definitions offered by well known rating agencies.
īMoodys: Ratings are designed exclusively for the purpose
of grading bonds according to their investment qualities.
īAustralian ratings: A corporate credit rating provides
lenders with a simple system of gradation by which the
relative capacities of companies to make timely repayment
of interest and principal on a particular type of debt can
be noted.
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39. FUNCTIONS OF CREDIT
RATINGS
The credit rating firms are supposed to do the
following functions:
1. Superior information
2. Low cost information
3. Basis for a proper risk-return trade off
4. Healthy discipline on corporate borrowers
5. Formulation of public policy guidelines on
institutional investment.
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40. BENEFITS OF CREDIT RATING
īLow cost information
īQuick investment decision
īIndependent investment decision
īInvestors protection
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41. BENFITS TO RATED COMPANIES
īSources of additional certification
īIncrease the investors population
īforewarn risks
īEncourages financial discipline
īmerchant bankers job made easy
īForeign collaborations made easy
īBenefits the industry as a whole
īLow cost of borrowing
īRating as a marketing tool
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