Day: October 4, 2020

Factors That Affect Capital Structure Availability of securities – This influences the company’s use of debt finance which means that if a company has sufficient securities, it can afford to use debt finance in large capacities. Cost of finance (both Read More …

Venture capital is a form of investment in new small risky enterprises required to get them started by specialists called venture capitalists. Venture capitalists are therefore investment specialists who raise pools of capital to fund new ventures which are likely Read More …

A form of long term debt raised after a company sells debenture certificates to the holder and raises finance in return. The term debenture has its origin from ‘DEBOE’ which means ‘I owe’ and is thus a certificate or document Read More …

This is finance of a kind whereby a company will make arrangements for the use of the services of a credit card organisations (through the purchase of credit cards) in return for prompt settlement of bills on the card and Read More …

This finance is ideal to use as bridging finance in sense that it should be used to solve the company’s short term liquidity problems in particular those of financing working capital (W.C.). It is usually a secured finance unless otherwise Read More …

Leasing is a contract between one party called lessor (owner of asset) and another called lessee where the lessee is given the right to use the asset (without legal ownership) and undertakes to pay the lessor periodic lease rental charges Read More …

Bills of Exchange are a source of finance in particular in the export trade. A Bill of Exchange is an unconditional order in writing addressed by one person to another requiring the person to whom it is addressed to pay Read More …

Lack of security Ignorance of finances available Most of them are risky businesses as there are no feasibility studies done (chances of failure have been put to 80%). Their size being small tends to make them UNKNOWN i.e. they are Read More …

Debt finance is a fixed return finance as the cost (interest) is fixed on the par value (face value of debt). It is ideal to use if there’s a strong equity base. It is raised from external sources to qualifying Read More …

PREFERENCE SHARE CAPITAL (Quasi-Equity) – It is also called quasi-equity because it combines features of equity and those of debt. It is preference because it is preferred to ordinary share capital EQUITY FINANCE – For small companies, this is personal Read More …