Below this post is all about the detail explanation of internal and external financing? Finance is an important part of business and acted as a blood running in our body for life.
Retained earnings: When a company has profits, it can make the decision to separate part of them or their entirety to reinvest them in operations.
Issuance of shares: In the limited company, the contributions of the partners are captured through the issuance of shares, which may be common or preferred.
- Short term
By credit institutions: The operations that can be carried out with this type of entities to obtain short-term funds, among others, are the following:
- Direct loans
- Discount of documents
- Secondary loans
- Other sources: Companies can obtain funds through other modalities, such as:
- Advance customer
- Accounts of suppliers
By credit institutions: The destination of these credits is oriented in particular to strengthen the other sources: fixed assets of the industries and are generally backed by mortgage and / or collateral. There are other ways to attract resources, such as financial leasing and the issuance of obligations.
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