External Sources of Long Term Finance for Sole Traders, Partnership Firms and Companies

Accounting for
business

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Sources of long term finance.......................................................................................................3
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Commercial enterprise accounting is the systematic recording, reading, interpreting and offering
of economic data. Accounting can be completed via one individual in a small enterprise, or with
the aid of unique teams in large companies (Al-Htaybat and et.al, 2018). In this report discuss
about the external sources of finance that are needed for sole trader, partnership firm and
company.
TASK
Sources of long term finance
Long-term finance can be described as any economic instrument with maturity more than
12 months consisting of venture capital, debenture and bank loan.
Venture Fund: It is the part of private stock and a type of lending that consumers offer to
startup groups and small groups which may be believed to have lengthy-term boom capability.
Benefits:
 Through venture capital can borrow huge amount of money.
 It provides guidance, consultation and decision in business.
 Task capitalists provide an opportunity for expansion.
 It is useful in building networks.
 There is no responsibility to repay the money.
 Assignment capitalists are normally sincere.
 It can help with hiring and constructing a crew.
Disadvantages:
 Approaching a mission capitalist can be tedious.
 Mission capitalists normally take a more time to take a decision.
 Locating buyers can distract a commercial enterprise proprietor from their commercial
enterprise.
 Sizeable due diligence is needed.
 The enterprise is expected to develop hastily (Bell and et.al, 2018).
Debentures: It is a another form of obtain money through long term finance. It is much less
highly priced compared to the cost of equity or preference capital because it charges fixed