Long term financing

presentation of presentation.

1. Prepared To

2. Presentation on: long term financing Course: Working Capital Management Course Code: FIN 408

3. What is long term financing? Long-term finance can be defined as any financial instrument with maturity exceeding one year (such as bank loans, bonds, leasing and other forms of debt finance), and public and private equity instruments.

4. What is an example of long-term financing? Car loans, home loans and certain personal loans are examples of long-term Financing. Long term loans can be availed to meet any business need like buying , machinery or any personal need like owning a house.

5. Time to maturity Maturity is the duration or date when a bond’s principal amount is repaid with interest. For example, a 10-year government bond matures in 10 years. The bondholder receives the principal amount along with interest at that time. Most commonly, maturity is referred to as time to maturity. This depicts the amount of time between now and the bond maturity date

6. What are the characteristics of long term financing? Characteristics of long-term debt include a higher principal balance, lower interest rates, and more significant impact on your monthly cash flow.

7. What are the sources of long term financing? Capital market, special financial institution, banks, non-banking financial companies, retained earnings and foreign investment and external borrowings are the main sources of long- term finances for companies.

8. When should a business use long-term financing? Long-term financing is usually used to purchase major assets such as buildings and equipment. Despite some risks, long-term debt is a common source of financing for businesses.