1.

Explain sources of Business finance on the basis of the period.

Answer»

1. Short term sources – 

It is required to meet the day to day needs of the business. The short term finance is also known as short term capital which is required for a period not exceeding one year. 

2. Medium-term finance – 

It is required for modernisation, sales promotion, innovation in business. It is taken for a period ranging between 1 to 3 years. 

3. Long term finance – 

Funds required for more than 5 years. These funds are required for making an investment in fixed assets and to meet the permanent needs of the business.


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