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INTRODUCTION: This topic provides an overview of the various sources from where funds can be procured for starting as also for running a business. It also discusses the advantages and limitations of various sources and points out the factors that determine the choice of a suitable source of business finance.

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SOURCES OF BUSINESS FINANCEINTRODUCTION*MEANING, NATURE AND SIGNIFICANCE OF BUSINESS FINANCE*(a) Fixed capital requirements(b) Working Capital requirementsCLASSIFICATION OF SOURCES OF FUNDS*Period Basis Ownership BasisSource of Generation BasisSOURCES OF FINANCE1.Retained Earnings#2. Trade Credit#3 Factoring#4 Lease Financing#5 Public Deposits#6 Commercial Paper#7 Issue of Shares(a) Equity Shares(b) Preference SharesTypes of Preference Shares 1. Cumulative and Non-Cumulative:2. Participating and Non-Participating3. Convertible and Non-Convertible8 DebenturesTypes of Debentures 1. Secured and Unsecured: 2. Registered and Bearer: 3. Convertible and Non-Convertible:4. First and Second:9 Commercial Banks10 Financial InstitutionsINTERNATIONAL FINANCING(i) Commercial Banks(ii) International Agencies and Development Banks(iii) International Capital Markets(a) Global Depository Receipts (GDRs):(b) American Depository Receipts (ADRs):(c) Foreign Currency Convertible Bonds (FCCBs):FACTORS AFFECTING THE CHOICE OF THE SOURCE OF FUNDS(i) Cost: (ii) Financial strength and stability of operations: (iii) Form of organisation and legal status:(iv) Purpose and time period(v) Risk profile:(vi) Control:(vii) Effect on credit worthiness:(viii) Flexibility and ease(ix) Tax benefits: CONCLUSIONSOURCES OF BUSINESS FINANCEINTRODUCTIONThis topic provides an overview of the various sources from where funds can be p

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