Sources is made by the contract or orally. Forms

Sources of short-term financing:Trade credit. It is the most widespread source of short-term financing. It represents the loan which supplier of products or materials grants to the buyer. Execution of this transaction can is made by the contract or orally. Forms of the trade credit are the allotted credit and the promissory note. The allotted credit (open account) allows the buyer to buy goods with a payment delay. This informal agreement under which the buyer receives products before pays for it. The promissory note represents the debt obligation of the buyer in writing to pay a certain sum of money to the supplier to specific term.Loans from financial institutions. The enterprise can address commercial bank or other financial institution for a short-term loan. Loans happen secure and poor. The secure loan is such loan which is issued under a guarantee of some value which the creditor obtains in case of bankruptcy of the borrower. For example, own property of the enterprise can be providing. It is possible to allocate different forms of such providing: accounts of debtors, inventory holdings, other other property. The loan under accounts of debtors means that as pledge debt to the enterprise is used from his clients on open accounts. Receivables can be on sale third-party finance company.This procedure is called factoring. When the firm borrows on the security of inventory holdings, the bank accepts from it the receipt that if the firm doesn’t pay a debt, then its inventory holdings will pass to creditors. Short-term loans are also issued on the security of any personal (“liquid”) estate, for example, of cars and the other equipment. The poor loan is granted without any pledge. In this case the creditor relies upon profitability of the enterprise or its reputation. As guarantees the creditor demands that the borrower held a certain sum of money on the bank account (the compensation rest). Other type of a poor loan is “credit line”. It represents the maximum sum which the bank agrees to give the companies during the certain period of time.Bills. It is a short-term source of financing which represents the debenture issued by the company. The company which issues bills undertakes to return the sum of money specified in the bill to a certain time.Long-term financing.When the enterprise carries out long-term projects, it resorts to external and internal sources of financing. Treat internal sources: implementation of own assets by the enterprise and reinvestment of the got profit. Treat external: long-term loans, leasing, bonds and actions.

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