economic theory
A small company will have to ensure its capability of all three in spite of the fact that in comparison to a larger company, it will be paying a higher interest rate, will be risking security based on the owner’s personal assets rather than company assets and repayment terms will probably be more rigid rather than flexible as banks rightly see the small company borrower as a higher risk. (This is explained later on when discussing the problems faced by the small company in raising finance.)There are sources of loans other than from banks. Companies usually resort to these financial institutions as a last resort because their interest payments are fixed and if inflation falls, this will make the borrowing very expensive. These financial sources can include pension funds, insurance companies, merchant banks, the European Investment Bank and the ICFC. (Investment and Commercial Finance Corp[oration) There is also the “medium term note” open as an alternative which is a promisory note issued by the company promising to pay a specified amount on a specified date. The procedure is for the company to write the note and then to sell it in the market place. The interest rate can be fixed or may fluctuate and the maturity date of t
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Some common words found in the essay are:
Loan Stock, Securities Market, Stock Exchange, Finance Corporation, Issues Market, , Companies Acts, Stock Market, Mascon IRWIN, Greed Risk, preference shares, raising finance, secondary market, company issue, stock exchange, raise finance, specified date, loan stock, ordinary shares, debenture holders, purchasing raw materials, cost debt limited, bond loan stock,
Approximate Word count = 2043
Approximate Pages = 8 (250 words per page double spaced)
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