Write short note on Methods of raising capital.
Answers
Answer:
Debt capital is usually raised by obtaining bank loans, personal loans, credit cards or bonds etc. Equity capital, on the other hand, is raised by selling shares of stock. Ideal capital raising skills, however, require determining a mix of both these types such that it is most cost effective.
company may raise funds for different purposes depending on the time periods ranging from very short to fairly long duration. The total amount of financial needs of a company depends on the
nature and size of the business. The scope of raising funds depends on the sources from which funds may be available. The business forms of sole proprietor and partnership have limited opportunities for raising funds. They can finance their business by the following means :-
1.Investment of own savings
2.Raising loans from friends and relatives
3.Arranging advances from commercial banks
4.Borrowing from finance companies