GENERAL SOURCES OF FINANCE FOR BUSINESS ENTERPRISES

GENERAL SOURCES OF FINANCE FOR BUSINESS ENTERPRISES

  • Savings: Business enterprises, especially sole proprietorship and partnership, can raise capital from their personal or owner’s savings.
  •  Borrowing: Business enterprises, especially the small ones, can borrow money from friends and relatives.

  •  Equipment leasing: Equipment can be leased out by companies in order to raise capital. read how to raise capital for business
  •  Retained profits: The profits made by the company can be set aside or ploughed back as working capital.
  •  Trade credit: Raw materials can be purchased by the company on credit.

  •  Hire purchase: Facilities can be granted to a company to buy and pay by installments.
  •  Sale of shares: Business enterprises can raise capital by issuing shares for public subscription.

  •  By debentures: These are long term loans obtained from the general public at a fixed interest in which companies raises money.

  •  Bill of exchange: This is a document duly signed by the debtor’s bank to the creditor and the creditor cashes money with some discounts.

  • Grants: Business enterprises, especially public corporations, can obtain capital special financial grants from government international financial institutions like African Development Bank (ADE International Monetary Fund (IMF ); from other foreign countries.

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