Advantages And Disadvantages Of Bank Loan

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Share Capital: Rising funds from the allotment of shares is one of the fundamental source of finance for private and public companies.Share capital in private ltd company is the amount intvested by the owner of company in exchange of its shares. As the company is private and unlisted so it cannot raise the funds from public.There is a limit to raise funds and there no more than 50 shareholders in private company.

Angel Investors: An angel investors are group of people who has high net worth and lend the funds to the company in exchange for ownership stake in company. Angel investors first scan the the growth of the business present as well as the future projection before lending the funds. Sometimes angel investors lend money on collateral
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2.Require less investment of both time and money.
3.It is a fast process as compare to venture capital and public placements.

Bank Loan: It is widely used source of finance in which bank lend money to the borrower in return to security that is why it is known as secured loan.A loan can be short term loan or long term loan depending upon the amount borrowed from bank.Advantages of bank loan are:
1.Flexibility,the only thing taken into consideration is making regular installmets on time.
2.The borrower can also get the tax benefits as loan is a tax-deductible expense.

Government Funding: In some areas government help the businesses to grow up especially small and medium scale businesses.in this case government monitor the plans of business and if it thinks that this business will going to help society and revenue generation then government lend money to the business.Advantages:
1.Promoting of products
2.Inexpensive.

Venture Capital:Venture capital is one of the oldest method of funding the business especially at start up phase foe example if a company wants to establish its business in the foreign market and needs heavy funds then it has to go for this source of finance because amalgamating with the business already running in the hostile country leads to less burden as it needs not to scan the internal and external environment of that
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