This document discusses various sources of finance for companies. It outlines long-term sources such as bank loans, equity shares, debentures, and internal accruals. Medium-term sources include leasing, hire purchase, bonds, and medium-term loans. Short-term sources are bank overdrafts, trade credits, and customer advances. The document also discusses share capital, types of shares including preference and equity shares, borrowed funds both secured and unsecured, and international and domestic sources of funds.

1. SOURCES OF FINANCE
Submitted by : Saurabh Rai
Shreyas Ghosalkar
Vaibhav Sawant

3. Long
Term
Finance
Long term
bank loan
Equity
shares
Government
subsidies
Debentures
Internal
Accruals
Deferred
credit
Long Term Finance

4. MEDIUM TERM FINANCE
• Leasing: A lease is a contractual arrangement calling for the lessee (user) to pay the
lessor (owner) for use of an asset.
• Hire Purchase: The ownership is transferred to buyer after all the higher purchase
installments are paid up.
• Bonds: A bond is an instrument of indebtedness of the bond issuer to the holders
• Medium Term Loan

5. Short
Term
Finance
Bank
Overdraft
Bank
Loan
Creditors
Debt
Factoring
Trade
Credits
Customer
Advances
Short Term Finance

6. SOURCES OF FUNDS
A company might raise new funds from the following sources:
· The capital markets:
i) new share issues, for example, by companies acquiring a stock market listing
for the first time
ii) rights issues
· Loan stock
· Retained earnings
· Bank borrowing
· Government sources
· Business expansion scheme funds

7. SHARE CAPITAL
Funds raised by issuing shares in return for cash or other considerations. The
amount of share capital a company has can change over time because each time a
business sells new shares to the public in exchange for cash, the amount of share
capital will increase. Share capital can be composed of both common and preferred
shares.
It is also known as "equity financing".

8. TYPES OF SHARE CAPITAL
ISSUED AND SUBSCRIBED
CAPITAL
• EQIUTY SHARE CAPITAL
• PREFERENCE SHARE CAPITAL
AUTHORIZED SHARE CAPITAL
• EQUITY SHARE CAPITAL
• PREFERENCE SHARE CAPITAL
SHARE CAPITAL

9. PREFERENCE
• Rate of dividend is fixed.
• Do not carry the voting rights.
• Can be converted into equity shares.
• Preference shared may be redeemed.
• Do not have the right to participate in
the management of the company
EQUITY
• RATE OF DIVIDEND IS DECIDED BY
THE BOARD OF DIRECTORS , YEARS TO
YEARS DEPENDING ON PROFIT.
• CARRY THE VOTING RIGHTS.
• CANNOT BE CONVERTED.
• A COMPANY MAY BUY-BACK ITS
EQUITY SHARES.
• EQUITY SHARES HAVE THE RIGHT TO
PARTICIPATE IN THE MANAGEMENT
OF THE COMPANY.

10. BORROWED FUND
BORROWED FUND
SECURED LOAN UNSECURED LOAN

11. International Sources
• EXTERNAL COMMERCIAL BORROWING (ECB)
• FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB’S)
• ADR’S
• GDR’S
• FDI
• SYNDICATED LOANS

12. DOMESTIC SOURCES
• DEBT
• EQUITY
• RETAINED EARNING