Raising Finance

Lee Charlie
Mind Map by Lee Charlie, updated more than 1 year ago
Lee Charlie
Created by Lee Charlie over 6 years ago


Business Studies

Resource summary

Raising Finance
1.1 How secure is the source
1.2 How expensive is the source
1.3 Is enough being raised
2 Short Time Finance
2.1 The determination can be very important for taxes. Assets held short-term are generally taxed at a higher rate than assets held for more than a year.
2.2 Borrowed capital that will be repaid within one year
3 Medium Time Finance
3.1 A day trader who seldom holds open positions overnight may consider a stock that is held for a couple of weeks as a "medium term" position, whereas a long-term investor may define medium term as a holding period of one to three years. Similarly, home owners may regard anything less than 10 years as a medium term horizon when it comes to real estate.
3.2 The medium term sources of finances are loans. These are the ones that are offered for more than an year but less than 10 years. Mostly offered to expand an existing business.
4 Long Term Finance
4.1 The media frequently advises people to "invest for the long term", but determining whether or not an investment is long term is very subjective. A day trader, for example, would define "long term" much differently than a buy-and-hold investor, who would consider anything less than several years to be short-term trading.
4.2 Borrowed capital that will be repaid over a specific time period longer than one year.
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