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Working Capital Finance

Working Capital Finance. Short-term Sources of Finance. Trade Credit Accrued Expenses and Deferred Income Bank Borrowings Factoring of receivables Commercial Paper. Trade Credit Trade credit represents the credit extended by the suppliers of goods and services. It is a spontaneous

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Working Capital Finance

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  1. Working Capital Finance

  2. Short-term Sources of Finance • Trade Credit • Accrued Expenses and Deferred Income • Bank Borrowings • Factoring of receivables • Commercial Paper

  3. Trade Credit • Trade credit represents the credit extended by the • suppliers of goods and services. It is a spontaneous • source of finance. • The confidence of suppliers is the key to securing trade credit. • The cost of trade credit is: • Discount % 360 • x • 100 – Discount % Credit period – Discount period

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