UNDERSTANDING VARIOUS FINANCING INSTRUMENTS

摘要

After you have computed your financial needs, it is necessary to know whether you require short-or long-term financing to be able to decide where to source your funding and what financing instruments are most appropriate. There are formal and informalsources of finance. Informal sources are money-lenders, friends and relatives. Formal sources include banks; equity sources such as stock exchanges, venture capitalists and business angels; trade credits usually from suppliers or from purchasers; and government grants and aid. There are also a number of financing instruments that an SME can choose.