Sources of Business finance

There are various sources of business finance. Short-term finance is one of them is needed in running the day to day activities of the business. These activities include payment of wages and salaries to the employees, purchasing the office space, the hiring of electronics, and bill payment such as the electricity bills, repair, and maintenance expenses. Sources of short-term finance are financial institutions, trade credit, and installment purchases. The financial institutions offer financial support to the business people as well as advice on how to grow and manage their businesses. Trade credit involves making purchases on credit. Trade credit gives the business persons the freedom to meet their financial needs and pay their credit at a future date. More info at

The second source of finance is the medium term finance. Medium term finance of the business is expected to meet the business needs of the business usually between one to five years. This source of finance is vital to a running business in that it aids in the completion of medium-term projects, replacement of machinery and plant. The major sources of this finance are the financial institutions, hire purchase and financial institutions. The financial institutions offer financial support and also give managerial assistance on a couple of issues. The commercial banks also play a major role in the provision of finance. This is because they provide loans against securities. The hire purchase also helps the business persons in that they are allowed to make their payments at regular intervals referred to as installments. Read on personal loan bad credit

Long-term finances are used to finance the long-term projects of the business. The sources are financial institutions, equity finance leasing, retained earnings. Equity shares are widely used all over the as the major source of capital for businesses operating under large scale basis Equity share is subscribed in order to generate income. The retained earnings can be used to finance the business projects and generated from excess profits. Bad credit loan is the loan one can get when one's credit is not good. Bad credit is easier to have if there is collateral attached. The advantages of bad credit loan include; one can borrow large amounts of money, no worry about credit history, there is quick loan approval. However, there are disadvantages which include the interest rates charged are high, lack of enough time to build the credit back up and lastly there is no cosigner.