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Chapter. Financial Management. 18 Condensed. Sources of Funds & Financing. Sources of Funds. Debt Capital Equity Capital. Types of Financing. Short-Term Long-Term. Short-Term Financing. Short-Term Trade Credit 2/10, net 30 Promissory Notes Family/Friends Banks, etc. Secured Loan - PowerPoint PPT Presentation
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McGraw-Hill/IrwinUnderstanding Business, 7/e
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Chapter
18Condensed
Financial Management
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Sources of Funds&
Financing
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Sources of Funds
1. Debt Capital
2. Equity Capital
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Types of Financing
1. Short-Term
2. Long-Term
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Short-Term Financing
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Sources of FundsShort-Term
• Trade Credit– 2/10, net 30
• Promissory Notes
• Family/Friends• Banks, etc.
– Secured Loan– Unsecured Loan
• Factoring• Commercial
Paper
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Different Forms of Bank Loans
• Secured Loans (collateral)– Pledging (accts receivable)– Inventory Financing (raw materials)
• Unsecured Loans• Line of Credit (not guaranteed)
– Revolving Line of Credit (guaranteed)• Comm’l Finance Companies
– Non-banks
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Long-Term Financing
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Sources of FundsLong-Term
• Debt– Term-Loan– Bonds
• Secured• Unsecured
• Equity– Stock– Retained
Earnings– Venture Capital
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Long-Term Debt Financing
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Term Loans
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BondsClasses
¢Unsecured¢Debenture
¢Secured¢Mortgage
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Long-TermEquity Financing
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Sources of Equity Financing
Equity Capital
Internal Sources
External Sources
Retained Earnings
Owner Contribution
sSale of Partnerships
Venture Capital
Public Sale of Stock
