Equity Sources is the money placed by some individuals or entities in a business in exchange of some shares for a specific business. The equity sources in small business companies are different than those of big companies. In the small business companies, it is most likely that most of the equity sources, are from the family members or close friends. While in major companies, most of the equity sources come from the investors as stocks. the stocks are the shares which the owners put as a capital for their business.
In a certain period, the company may need to raise the financial sources, to make necessary adjustments towards the company, or to raise its capital. In order to achieve that, the company retains the profits or issue new shares for the share holders; Or issue new shares for new share holders.
Debts Sources are the assets which are owed to the company; or they are the expected purchasing power before the company actually effect any gain. The debts sources may be in the form of loans, bonds or lines of credit. Companies depend on one of those sources to provide their finance.
The loans are the amount of money the business borrowed from a lender, the loans plus the interest have to be paid in a constant way agreed between the two parties. For some companies the main source of finance are the loans. For other companies, the bonds are the main source of finance.
The bonds could be considered as a loan from the investor to the company for issuing the bonds, the returns of those bonds, should be paid to the investors periodically according to the offer from the issuers. There is also another source of finance, which is the lines of credit; the credit lines are also loans, but the borrower is the government or any other financial business and the lender is a bank.
Many companies merge between the different sources of capital assets to fulfil their requirements of finance according to their type; The types are Sole Property, Private Limited Companies, Public Limited Companies, Partnerships and other types.
Tags: bonds, equity sources, Equity Sources is the money <BR/>