SOURCES OF FINANCE MEDIUM Term Loans Leasing - Operating - Financial - Sale and Leaseback Hire Purchase.

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Presentation transcript:

SOURCES OF FINANCE MEDIUM Term Loans Leasing - Operating - Financial - Sale and Leaseback Hire Purchase

MEDIUM SOURCES (con) Term Loans - nature and flexibility - interest rate charges - term loan agreements - preparing a term loan

MEDIUM SOURCES (con) Leasing - definition and development - types of leases Hire Purchase - types of Agreements - nature of Agreements - extent in Ireland

SOURCES OF FINANCE LONG TERM Debt - Long term loans - Debentures - Project financingROJECT FINANCING Equity - Owner’s Capital - Depreciation - Preference Shares - Ordinary Shares

DEBENTURES - unsecured - mortgage bonds - guaranteed debentures - debentures with a warrant - subordinated debentures - junk bonds - perpetual debentures - income bonds - indexed bonds - zero coupon bonds Characteristics - risk, income and control effects

DEBT Five characteristics - maturity - security - repayment provisions - interest - denominations Public issues - trustee responsibilities - to see al legal requirements are met - that terms of indenture are met - appropriate action in case of default New Issues and outstanding issues Rating agencies Bonds in Ireland Debt Equity Ratio Times Interest covered

PROJECT FINANCING A financing of a particular economic unit in which a lender is satisfied to look initially to the cash flows and earnings of that economic unit as the source of funds from which a loan will be repaid and the assets of the economic unit as collateral for the loan Characteristics Construction and development can take years Debt on Balance Sheet would distort financial strength of the company Any one financial institution could hardly afford the risk attaching to such loans

OWNERS CAPITAL AND DEPRECIATION Importance Opportunity cost Depreciation

PREFERENCE SHARES - straight preference shares - cumulative preference shares - redeemable preference shares - participating preference shares - convertible preference shares - export preference shares

ORDINARY SHARES - Ownership - Income - Issuing new shares - Going public - Deferred shares

EQUITY FINANCING STAGES Early Stage - seed - start-up - other early stage Expansion - venture Later Stage - ongoing Venture Capital in Ireland BES

GOVERNMENT ASSISTANCE Grants - feasibility - capital - R & D - Process development - technology transfer Structural Funds Enterprise Funds Loan Guarantees Rent and Interest Subsidies etc

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