1. DIFFERENT FINANCING OPTIONS

2. QUESTIONS TO ASK WHEN
LOOKING FOR FINANCING
WHAT AMOUNT DO I NEED?
 HOW DO I RAISE THE FUND? IS IT THROUGH
EQUITY OR DEBT?
 WHAT INFORMATION DO I NEED TO
PROVIDE THE LENDER/INVESTOR
 WHAT ARE THE REPAYMENT TERMS? DO I
HAVE TO PAY INTEREST? IF SO, WILL IT
VARY OVER TIME OR FIXED?
 HOW LONG WILL IT TAKE TO ACQUIRE THE
FUNDS?

3. QUESTIONS LENDERS WILL ASK
BEFORE TAKING DECISION
 INFORMATION
TO DERTERMINE HOW
THE BUSINESS IS MANAGED
 THE SIZE OF THE LOAN AS
COMPARED TO HOW MUCH YOU HAVE
 COMPANY’S ABILITY TO LIQUIDATE
ITS CURRENT ASSETS

4. FINANCING METHODS
 SHORT
TERM FINANCING
 LONG TERM FINANCING

5. Long Term Sources of Finance
 Domestic
 Foreign
Sources of Finance
Capital

6. Domestic Sources of Finance
 Debt
 Equity
– Share Capital
 Retained earnings
Share Capital :
Equity Share Capital
Preference Share Capital
Right Issue
Warrants

7. Debt Financing
 Debt
securities:
- Secured & unsecured debentures
- Convertible & non convertible debentures
- Zero interest fully convertible debentures
- Secured premium notes
- Deep discount bonds
 Loan from financial Institutions
 Public Deposits
 Term loans from banks

8. Debentures
Kinds Of Debentures







Bearer Debentures
Registered Debentures
Perpetual Or Irredeemable Debentures
Redeemable Debentures
Debentures issued as Collateral Security for a Loan
Naked Debentures
Secured Debentures

9.  Advantages
 Disadvantages
 Debenture
vs. Share Capital
 Methods of Redemption of Debentures
- Redemption of Debentures on a Fixed Date
- Redemption of Debentures by periodical
drawings
 Sinking Fund
 Debenture Redemption Reserve
 Convertible Debentures
- Valuation of Convertibles
- Institutional Conversion of Debentures / Loan
into equity

10. New Debt Instruments
 Zero
Interest Bond
 Equity warrants with NCDs
 Secured premium Notes
 Deep discount Bonds
 Zero Coupon Convertible Notes
 Debt for Equity swap
 Multi-option Secured Redeemable convertible
Debentures
 Callable Bond
 Option Tender Bonds
 Guaranteed Debentures

11. continued
 Subordinated
Debentures
 Floating Rate Bonds
 Junk Bonds
 Indexed Bonds
 Stepped-up Debentures
 Inflation – Adjusted Bonds
 Coupon Stripping
Asset Securitization

12. TERM LOANS
 Use
to finance your permanent working capital,
purchase of new equipment, construction of
buildings, business expansion, refinance existing
debt and business acquisitions.
 Term loans are repaid from the long-term
earnings of the business.
 Therefore, projected profitability and cash flow
from operations are two key factors lenders
consider when making term loans.
 Generally, interest rates on long- term loans are
higher than for short-term loans.