Finance Sources with Finance Training in Chandigarh

Sources Of Finance : Finance Training in Chandigarh

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Sources of finance : To Manage the business you need to learn the  financial  need of a business are of a peculiar nature with finance training in Chandigarh. The type and amount of funds required usually differs from one business to another.

For instance, if the size of business is large, the amount of funds required would also be large. Similarly. Is is requirement for financial need that is more in manufacturing business as compared to trading business. The business need funds for longer period to be invested in fixed assets like land and building,machinery etc. Sometimes, the business also needs funds to be invested in shorter period. That is based on the period for which the funds are required, The business finance is classified into three categories.

1. Short Term : The short term capital, Which can also be called working capital, is the capital required for the purchase of raw materials and It is used to meet the day to day expenses, It is in connection with the conversion of raw materials that is in the finished products   such as the payment of wages, salaries and tax, These loans are obtained usually for a short period of one year or a little more.
2. Medium Term : For the repairs, maintenance and replacement of machines the medium term capital is used which can be repaid over a comparatively shorter period.Medium-term finance is utilised for all such purposes where investments are required for more than one year but less than five years.
3. Long Term :The various sources of raising long-term funds includes as,equity shares, preference shares, retained earning, debentures, bond, term loans,leasing,hire purchase and public deposits. The  Long term funds are the base for the financial structure of a firm. The long term capitals, which is also known as fixed or block capital, is needed to acquire fixed and permanent assets,namely,land building,plant and machinery and tools. As the capital invested in theses assets is of a permanent nature, the repayment of such loans can be made only over a long period. Generally financial needs of more than 5 years are included in long term finance. Every organization need different types of finance, i.e. long term,medium term as well as short term. But the combinations in which these are used differ from one business to another. For example, steel industry requires more long-term finance to be invested in land and building and machinery as compared to the manufacturing hosiery items, requirement of short term finance would be more than that of long term finance.

Short Term Sources of finance :

1. Indigenous bankers
2. Advances
3. Account Payable
4. Pills Discounting
5. Installment Credit
6. Accrued Expenses and Deferred Income
7. Trade Credit
8. Factoring

Indigenous Bankers : They used to charge very high rates of interest and exploited the customers to the largest extent possible.  Private Money-lenders and other country bankers used to be the only source of finance prior to the establishment of commercial banks.Now a days with the development of commercial banks. They have lost their monopoly. But even today some business houses have to depend upon indigenous bankers for obtaining loans to meet their working capital requirements.

2. Installment Credit : This is another method by which the assets are purchased and possession of goods is taken immediately but the payment is made in installments over a predetermined period of time. Generally, interest is charged on the unpaid price or it may be adjusted in the price. It is used as a source of short term working capital by many business houses But, in any case, It provides funds for sometime and which have difficult fund position

CBitss Technologies provides best finance training in Chandigarh. It give the educational knowledge how to balance the financial status for their business growth.

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