Long-Term Finance Case Study

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The finance available for a long period especially three years and above is known as long-term. That is, repayment of the long-term finance can be done after three years. These finances are mainly used to purchase fixed assets. The popular long-term finance sources are owner 's capital, share capital, long-term loans, debentures, government loans and grants. Since Care UK provides health and social care services, it is very easy to get government loans and grants for their expansion.

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;
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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.
Medium-term Finance
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

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