What are the different sources of funds raising and finance?

What are the sources of short term finance?

• The most common sources of short-term finance for entities are:
• accrued wages and taxes 
• trade credit 
• bank overdrafts 
• commercial bills and promissory notes 
• factoring or debtor/invoice/trade finance 
• stock/inventory loans or floor-plan finance 

What are the sources of long term finance?

• Long-term debt finance is supplied to borrowers through financial institutions 
• acting as intermediaries, or 
• directly by the debt markets

Funds raising via:  

1. Financial Intermediation 

• Most entities tend to first look to financial institutions as suppliers of intermediated finance
• Most financial institutions offer
• Fixed-rate business loans
• Variable-rate business loans
• Instalment loans 
• Interest-only loans
• Fully drawn advances
• Lease finance

2. Leasing

• Leasing is a significant form of finance for entities 
• Leasing options and products include:
• Novated leases
• Hire-purchase agreements
• Finance leases
• Operating leases

3. Debt Financing 

• Entities wanting to raise debt finance have the following methods to choose from:
• Corporate bonds (unsecured)
• Notes (unsecured)
• Debentures (secured)

4. Equity Financing 

• At certain times, owners of entities may wish to expand their businesses or liquidate some or all of their ownership by selling ownership rights or shares to other investors
• This is performed through selling 
• ordinary shares (most common) 
• preference shares
• Rights
• Options

5. Hydrid debt securities 

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