S. M. NƏBİyeva, Ş. H. KƏRİmova f. S
Yüklə 1,26 Mb. Pdf görüntüsü
|
|
182 LESSON 24 THE SHORT-TERM AND LONG-TERM FINANCING The seasonal financial needs of a company may be covered by short-term sources of funds. The company must pay them off within a year. Businesses spend these funds on salaries and for emergencies. The most popular outside sources of short-term financing are trade credits, loans, factors, finance companies and government sources. About 85 percent of all US business transactions involve some sort of trade credit. When a business orders goods or services, it doesn’t normally pay for them. The supplier provides them with an invoice requesting payment within a settled period, say thirty days. During this period the buyer uses goods and services without paying for them. Commercial banks lend money to their customers by direct loans or by setting up lines of credit. A line of credit is the amount a customer can borrow without making a new request, simply by notifying the bank. Sometimes a company might sell its accounts receivable to a special financial broker – a factor. The factor immediately pays the cash, usually 50 to 80 percent of the accounts receivable. If a company needs funds to construct a new assembly line or to do research and development which may not bring in revenues for several years, it will need long-term sources of funds. It can do it by getting loans or issuing bonds. A long-term loan may have maturity of from one to ten years. Within this period the firm pays interest on debt. The maturity of bonds may be up to ten or even thirty years. The bond is a secured one if the company pledges collateral to secure the debt. Huge corporations with excellent credit history issue unsecured bonds which are called debentures. The company can pay a predetermined interest rate (the coupon rate) according to the agreement which specifies the terms of the bond issue. |