Internal Sources Of Finance Are

Term loan is a loan from a bank for a specific amount that has a specified repayment schedule and a floating interest rate. Term loan almost always mature between one and ten years. Syndicated loan is a single loan jointly financed by a consortium of financial institutions to provide financing for large projects. Banker’s guarantee is an undertaking by the bank to guarantee payment of a debt or performance obligation by the applicant.

Short-term self-liquidating bank loans—usually used to help with seasonal needs where the loan is repaid as receivables are collected.

1. Two major ways in which a company can grow are organically and inorganically (Davis, n.d.). Organic growth is growth that is achieved within an existing business, by increasing sales and number of clients to increase profitability. Organic growth can be achieved many ways. The easiest way is if a firm’s product is in high demand

Every entrepreneur drives towards growth. Usually the desire to become bigger, access a larger client base, increase earnings and wealth is a major goal of all business owners. Usually growth can be organic or inorganic.

business may also inherit the culture of the previous entity or struggle to entrench its

Companies with limited capital invest in other companies in order to increase their wealth and they use payback period to finance their company. Payback period means the period of time that a project requires to recover the money invested in it. The payback period of a project is expressed in years it is calculated as:

In business practices existing two main ways in which company may grow organic (by increasing turnover of existing business) and inorganic (by the acquisition of another business). When a corporation tries to expand in the organic way it might concentrate on developing it client base, reinvesting benefits in new assets with higher income, and enhance profitability to build it revenue. Business can expand through inorganic growth by converging with another company or purchasing

A business can develop by organic growth or inorganic growth a. Organic Growth: Organic growth in business refers to a company expanding its business through the use of its own resources and assets. Growing organically means a company expands without the use of mergers and acquisitions or other takeovers. An emphasis on organic growth is valued by many executives and investors since it shows a long-term, solid commitment to building the business. Organic growth can also be negative, meaning the company's business is actually contracting. Investors look at organic growth numbers to see if a company is increasing sales and revenues and if those increases are sustainable over the long term. Significance Organic growth shows how well management of a company is utilizing internal resources to increase sales and output. Mergers, acquisitions, and takeovers can provide an artificial boost to a company's sales and revenue figures; this can cloud the picture of how the company is managing its resources. By focusing on the organic growth of the company, executives and investors can see exactly how the company is meeting its goals through its own internal means. Workforce Issues Many executives prefer to grow their companies organically due to the complexity and organizational issues that result from mergers and acquisitions. One major issue is the effect of merging two company's workforces, which can often result in culture clashes and morale issues. Employees can resist changes in

Example of an organic growth of a company would be MacDonald fast food chain. This company started from the scratch and expands its business within the region and expands overseas. They increase their revenue and invested on purchasing properties and increase their product. A good example of inorganic company growing is when Nokia and Microsoft merge together for better customer base and new channels of distribution that resulted in increased growth.

The two major ways in which a company can grow are the organic growth or the inorganic growth. Inorganic growth- is a system of expanding the company by means of joining together with other companies to form what one may call a conglomerate. Inorganic growth involves mergers and take-overs.

In the business world companies are always trying to maximize their earning potential by strategically investing in short-term financing. In terms of finance short-term may mean months or even a couple of years. The type of finance method that is used is contingent on the specific needs of the corporation. These methods include trade credit, bank credit, financing through commercial paper, foreign borrowing, and the use of collateral, accounts receivable financing, inventory financing and hedging to reduce borrowing risk.

Organic growth is when resources and what is on ground of a company are used to increase growth through either expansion or profit, or through both of them.

* Short-term sources of funds are those with repayment schedules of less than one year. While the long-term sources of funds are those with repayment schedules of more than two years and can be consider as long-term depts.

Organic growth is where a company grows by increasing its turnover/sales revenues. (It can also be defined as growth of a company by building on its existing knowledge or resources). With an increased revenue the company can easily make profits, it then ploughs back the profits into the business enabling it to grow. To increase turnover/sales revenue the company can do so through increasing its customers (find new customers to add to existing ones) or developing new products. For instance, Sunlight and Berendsen growth is attributed more to organic growth whereby they have been able to increase their customers in existing locations and new EU operational areas.

2. Medium term finance :- Medium term finance or intermediate financing is done for a period intermediate between 1 to 10 years . Medium term financing is generally done for the purpose of maintenance or up gradation of the business. The sources of medium term finance are :