Which are the two types of finance required by the business concerns ? Give examples.
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The two types of finance required by the business concerns are as follows:
- Short time finance and long term finance are two type of finance requires by business concern.
- Short term financing includes account receivable financing, customer advances, overdraft agreement, on installment good selling.
- The process of long term financing includes loans from bank in long term,debentures and equity of issue, retain profit.
- This is an ongoing process where in different time different routes are applicable.
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The two types of finance required by the business concerns include Overdraft Agreement and Issuing Equities and Debentures.
Explanation:
- The finances are required by the business to enhance the business activities and to increase the customer base and earn more profit.
- The businessman raises the capital either by issuing equities and debentures or by getting short term loan from the bank.
- Bank provides short term finance as working capital through overdraft facility given on the current account.
- Also, long term loan facility, customer advances, selling goods at installments are other such types of finances required by the business concerns.
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