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What are the various sources of …

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What are the various sources of raising borrowed funds for a business? Which source is the best and why?

    • Posted by Natasha Mishra 4 years, 1 month ago

    CBSE > Class 11 > Business Studies
    • 1 answers

    Gaurav Seth 4 years, 1 month ago

    • The sources for raising borrowed funds include loans from commercial banks, loans from financial institutions, issue of debentures, public deposits and trade credit.
    • Such sources provide funds for a specified period, on certain terms and conditions and have to be repaid after the expiry of that period. A fixed rate of interest is paid by the borrowers on such funds.
    • At times it puts a lot of burden on the business as payment of interest is to be made even when the earnings are low or when loss is incurred. Generally, borrowed funds are provided on the security of some fixed assets.

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