The paper "Long-Term and Short-Term Finances for General Sportswear" is a perfect example of a finance and accounting case study. Long terms sources of finance refer to sources of finance that will be needed over a long period of time such as over a year. These sources of finance can be suitable for funding projects by the company such as during the process of setting up new outlets. An example of the source of a long term of finance available for Sportswear is shared. These are parts of ownerships of a company. The company can sell some of its shares to external shareholders so that it can get additional funds to expand its activities.
This implies that any person who wishes to be a shareholder in the company can take part in the purchase of shares in the business. In order to facilitate the sales of shares to the public, the company can seek the services of banking institutions (Carroll 2008). This can be followed by a process where shareholders have the freedom to sell their shares through the stock exchange. Another source of long-term funds for the business will be venture capital.
This is where the company can invest in a developing company when the other companies have great potential for growth (Griffin 2011). In this regard, general Sportswear can invest in its competitor company; Premier Sportswear. In return, the company can benefit from the profits of the company in which they have invested. In addition, government grant can be a source of finance for General Sportswear. These funds can be obtained from the local authorities and the national governments (Mayers & Mayers 2004).
This is mainly possible when the government wants to create incentives for developers to set up more firms. The company can also obtain bank loans that are offered by some banks to a period of up to 25 years (McKinney 2004). The loans are provided at a particular interest rate that is required to be paid when the company refunds the loans. Short-term sources of finance Some of the short-term sources of finance for general Sportswear include bank overdraft. This is where the bank allows the company to get additional funds despite not having enough funds to finance its activities. In addition, trade credit can be used to finance business activities of the company.
This can be achieved by obtaining a loan that is paid within a particularly short period such as 28 days so that the company can pay for the goods it has obtained (McLean 2003). Furthermore, the credit card is another form of short-term loan. This is where the business can be allowed to make payments for products and services by means of the credit card (Seidner, Zietlow and Hankin 2013). In addition, General Sportswear can get funding for its activities by leasing.
This is where the company can pay for a product but does not have the ownership for the product. This can be achieved by paying for resources such as land where business branches are located and at the end of the lease period, the land is returned to the owner.
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