Long-term financing is used to finance fixed assets, permanent working capital, and business expansion. It includes various sources such as equity share capital, preference share capital, and retained earnings, each with its merits and demerits. Financial institutions like SBI offer specific long-term loans for housing, education, and vehicles with varying interest rates based on customer profiles.

1. LONG TERM FINANCING

2. WHAT IS LONG TERM FINANCING ?

4. WHY LONG TERM FINANCE
• To finance fixed permanent/fixed long term assets
• To finance fixed permanent/fixed working capital
• To finance growth and expansion of business

5. NEED FOR LONG TERM FINANCING
• To finance fixed assets.
• To finance the permanent part of working capital.
• Expansion of companies.
• Increasing facilities.
• Construction projects on a big scale.
• Provide capital for funding the operations. This helps in adjusting the cash flow.

6. FACTORS DETERMINING LONG-TERM
FINANCIAL REQUIREMENTS
• Nature of Business
• Nature of Goods produced
• Technology used

7. SOURCES OF LONG TERM FINANCE
• EQUITY SHARE CAPITAL
• PREFERENCE SHARE CAPITAL
• REATAINED EARNINGS

8. EQUITY SHARE CAPITAL
• Types of Equity shares
• Merits and demerits
• Evaluation from company’s view point

9. PREFERENCE SHARE CAPITAL
• Types of Preference shares
• Merits and demerits
• Features of Preference shares

10. RETAINED EARNINGS
FEATURES
• Cost of financing
• Floatation cost
• Legal formality
ADVANTAGES
• Cheaper source of finance
• Financial stability
• Market value
DISADVANTAGES
• In proper utilization
• Over capitalization
• Low rate of dividend

11. RAISING LONG TERM FINANCE
• Initial public offer(IPO)
• Secondary public offer
• Preferential allotment
• Venture capital/private equity transactions
• Obtaining term loan

12. LONG TERM FINANCE GIVEN IN SBI BANK
• Housing loan :at 8.65% upto 30yrs max
• Education loan:11.25% upto 10years+course period
• Vehicle loan: white board-80% ,yellow board-75%
• Tractor loan:10%

13. ICICI
• COMMERCIAL BUSINESS LOAN
1. Commercial vehicles
2. Construction equipment
Specific interest rate applicable to a customer would be based on factors such as customer profile,
relationship and tenure of loan etc.
• LOANS AGAINST SECURITIES
This facility is available against the following securities:
1. Demat shares
2. Mutual Fund units
3. Fixed Maturity plans (FMP)
4. Exchange Traded Funds (ETF)
5. Insurance Policies
6. Savings Bonds
• PERSONAL LOAN – rate 11.59% upto 20lakhs, tenure 1-5 years
• CAR LOAN - 100% ex-showroom price of the car, with interest rates 9.10-13.25%, tenure 7 years