Define a coinkeeper in financing4/5/2023 ![]() ![]() (4) LEASE FINANCING – It is a contract in which the owner of the asset (lessor) gives right to use an asset to the user (lessee) for an agreed period of time in return of consideration in form of periodic payments called lease rentals. Debenture holders do not have any voting rights and there is no dilution of ownership.Ĭonvertible debentures are convertible wholly or partly into equity shares after a fixed period of time. It is an economical method of raising funds. If interest is accumulated it has to be paid by the company by liquidation of its assets. ![]() Non-convertible debentures are straight debt instrument carrying a fixed rate and have a maturity period of 5-9 years. It may be convertible or Non convertible. (3) DEBENTURE CAPITAL – Debenture capital is a financial instrument for raising long term debt capital. Rupee term loans – They are given for financing land, building, plant & machinery etc.įoreign currency term loan –They are given to meet foreign currency expenses towards import of machinery, equipment and technology. It represents secured borrowings for financing new projects as well as expansion, modification, renovation schemes. (2) TERM LOAN – Term loans are provided by Financial Institutions and Commercial banks. Preference shareholders do not have any voting rights but are they receive dividend at a fixed rate and before equity share holders. Preference share capital – It refers to the shares held by the investors who are not owners of the business. Dividend on equity shares depends upon the amount of profits and financial position of the business. Equity share holders have a voting right but they are paid dividend only after paying dividend to preference shareholders. They enjoy the rewards and bear the risks of ownership of the business. It may take two forms –Įquity share capital – It refers to the shared held by the owners of the business. It is the capital raised by a company by issue of shares. Incentive sources or Government Subsidies.There are several means of finance which are used to meet the cost of the project, the following means of finance may be available – Lenders primarily rely on the estimated cash flow or potential earning capacity of the project to service their loan. Project Financing is the activity of raising funds from the market, required to finance an investment proposal. ![]()
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