Long term sources of finance

Range of long term sources of finance is available for businesses including leasing, debt finance , equity finance and venture capital.Long term finance is used for major investments & is typically very expensive & less elastic than short term finance.

Sources of long term include:






* Owners who is invested money in the business. For partnership & sole traders this can be their savings. For limited companies, funds invested by their shareholders is called share capital.

* Loans from family, bank or friends.

* Debentures also issued by company to get capital.

* A mortgage,it’s a special type of loan for buying property plant and equipment where monthly payments are schedule over a numbers of years.

* leasing or Hire purchase, In this monthly payments are made for use of equipment such as a land, car etc. Leased equipment is rented but not owned by the firm. Hired machine/equipment will be owned by firm after final payment.

* Grants from the charities or  government to help businesses get started especially in areas of high unemployment.