Long-Term Finance Case Study
Share Capital: Share capital is the capital raised by a firm by issuing their shares in the markets. Shareholders are also owners of the company and the liability towards them are limited. The company is in profit, shareholders have a right to receive dividends based on the profitability. Care UK can use share capital for purchasing fixed assets like land and buildings. The share capital can be divided into two; …show more content…
Also government may provide grants on certain loans or projects. In order to avail this finance, the company has to fulfill certain conditions. Usually govt. provides financial aids to the projects and services which will benefit for the society.
The finance with repayment is less than three years and more than one year is comes under medium-term finance. Normally Care UK can utilise these kinds of funds for the medium-term requirements. These finances can be used for buying or leasing motor-vehicles, nursing home materials, equipments for lab etc.
Loan by Banks: Today banks are providing fixed rate of interest loans to small, medium, and even large firms. These loans are coming under secure loans and the firm has to submit all the relevant documents in the bank. The main advantages of bank loans are; very easy to sanction, interest rate is fixed, easy repayment installments are available. The disadvantages of bank loans are; it require for documents of