1. FINANCING METHODS

2. FINANCE Where To Turn:  Friends  Trade Credit: Repay within 30-90 days  Loans From Banks  Commercial Paper: Borrow from Bus.  Factoring: Sell A/R. High Interest  Pledging Inventories  Line of Credit: Pre-approved Bank Loan  Flooring: “Big Ticket” Items

3. ISSUING STOCKS AND BONDS  STOCKS  Advantages: No interest charges Does not affect borrowing Equity capital never needs to be repaid Disadvantages: Shared ownership, and perhaps loss of control Dividends are not an expense item BONDSAdvantages: No loss of control Interest payments are tax-deductible Disadvantages: Money must be repaid Bonds are a debt and can affect borrowing

4. TYPES OF BONDS  Term: Most common  Sinking Fund: Requires $ to be set aside  Callable: Can retire before maturity date  Debenture: Excellent financial reputation  Serial: Mature at different dates  Junk Bonds: High risk