Business Administration Sources

Business economics sources can be researched under the following criteria:

(1) Short-term finance:

Short-term finance is required to meet current business needs. Current needs may include the payment of taxes, wages or wages, repair costs, payment to claim, etc. The need for short-term funding stems from the fact that sales revenue and payments are not exactly the same at any given time. Sometimes sales can be low for purchases. Further sales may be on credit while buying cash. So short-term finances need to match these imbalances.

Authorization of short-term financing is as follows:

(i) Bank overdraft: The Bank's overdraft is very much used by a source of business economics. Under this customer, you can draw a certain amount of money outside of its original account balance. This makes it easier for the businessman to meet unexpected short-term expenses.

(ii) Payment: Foreign exchange transactions can be calculated with the banks. This provides cash to the bill holder, which can be used to fund immediate needs.

(iii) Progress from Customers: Progress is primarily required and received for confirmation of instructions. They are also used to fund the necessary actions to perform the job proportion.

(iv) Purchase of purchase: Purchase of installation gives more time to pay. Deferred payments are used to fund low-cost payments immediately.

(v) Catalog: Subscription fees and other export and import documents are used to borrow from banks and can be used as a short-term loan.

(vi) Financial institutions: Different financial institutions also help customers get out of financial difficulties by providing short-term loans. Certain associations may come short-term financial assistance for businessmen.

(vii) Trading income: It is the ordinary practice of the merchants to purchase credit, borrowing and storing of raw materials, stores and military units. Such transactions lead to an increase in the payment of transactions to be made after a specified period. Products are sold in cash and payment is made after 30, 60 or 90 days. This gives some freedom to businessmen to face financial difficulties.

(2) Budget:

This finance is necessary to meet the requirements of the long-term transaction (1-5 years). Such finances are basically required for balance, modernization and replacement of machinery and aluminum plants. This is also necessary for reorganization of the organization. They assist executives in completing medium-term tasks within the intended time. The following are authorizations for the financing of medium shares:

(i) Commercial banks: Commercial banks are the main sources of medium-sized financial division. They provide loans for different periods against appropriate securities. Upon termination, the loan can be repeated if necessary.

(ii) Rental Purchase: Rental Purchase means the purchase of installments. It allows business owners to have the necessary products with future payments in agreement. Needless to say, any interest is always charged at an outstanding amount.

iii) Financial institutions: Several financial institutions such as SME banks, Industrial Development Bank etc. also provide medium and long-term financing. In addition to providing funding, they also provide technical and administrative assistance in diverse matters.

(iv) Bonds and TFCs: Commitments and TFCs (Terms of Finance Certificate) are also used as a source of medium-term funding. Bonds are loan recognition from the company. It may be at any time by agreement of the parties. The capital controls enjoy a fixed rate of interest. Under Islamic Treasury bond issuance has been replaced by TFC.

(v) Insurance companies: Insurance companies hold a large amount of insurance policyholders. Insurance companies provide loans and make investments from this pool. Such loans are sources of financing for long-term companies for various companies.

(3) Long-term finance:

Long-term finance is one that is permanent or for more than five years. They are basically wishing to deal with business transformation or because of high modernization. This is also necessary to launch a new business plan or long-term development program. The following are its sources:

(i) Shares: This method is most widely used worldwide to raise long-term finance. Equity is subscribed by the public to create the capital on a large scale. Shareholders' equity shares the company's profits and losses. This method is safe and secure, in the sense that the amount received is refundable only when the company is wound up.

(ii) Arrested Revenue: Arrested revenues are foreign exchange reserves generated by profit. Emergency needs can be used to fund the transaction. This is also called a plowing return of profit.

(iii) Rental: Rental is also a source of long-term financing. With the help of leasing, new equipment can be purchased without much cash out.

(iv) Financial Institutions: Different financial institutions such as the former PICIC also provide long-term loans to corporate houses.

(v) Bonds: Bonds and participation certificates are also used as a source of long-term financing.


These are various financial divisions. Indeed, there is no hard and fast rule to distinguish between short and medium term sources or medium and long term sources. A source for example a commercial bank can provide both short-term or long-term loans according to customer needs. However, all of these sources are often used in modern business to finance funds.


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