Sources of business finance can be studied under the following heads:
(1) Short Term Finance:
Short-term finance is needed to fulfill the current needs of business. The current needs may include payment of taxes, salaries or wages, repair expenses, payment to creditor etc. The need for short term finance arises because sales revenues and purchase payments are not perfectly same at all the time. Sometimes sales can be low as compared to purchases. Further sales may be on credit while purchases are on cash. You can check out the financial debts at http://ukfinancehelp.co.uk/services/debt-management.
The sources of short-term financing are:
(i) The Bank Overdraft Bank overdrafts are a extensively used source of finance for business. The client is able to take out a certain amount of money in excess of the balance of his account. It makes it much easier for businessmen to pay for short-term, unexpected costs.
(ii) bill discounting Bills for exchange are able to be discounted by banks. This can provide cash to the owner of the bill that could be used to fund the immediate requirements.
(iii) Amounts of advance from customers: Advances are primarily demanded and are received to confirm the receipt of orders. However, they can also be used as a source of funding the operation needed to fulfill the job order.