Sources of Business Finance
Sources of business finance might be studied beneath the following heads:
(1) Quick Term Finance:
Short-term finance is necessary to fulfill the existing wants of the business. The existing wants may well contain payment of taxes, salaries or wages, repair costs, payment to the creditor, and so forth. The need for short term finance arises mainly because sales revenues and buy payments are not completely very same at all the time. In some cases, sales might be low in comparison to purchases. Further sales could be on credit even though purchases are on cash. So quick term finance is necessary to match this disequilibrium.
Sources of quick-term finance are as follows:
(i) Bank Overdraft: Bank overdraft is a very broadly applied supply of business finance. Beneath this client can draw a particular sum of money more than and above his original account balance. Thus it’s easier for the businessman to …
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