1. Sources of financing for a company

1. Sources of financing for a company

They are sources of financing of the liquid resources or means of payment available to a company to meet their monetary needs.

Financial res

ources of companies can be classified according to four different criteria:

• Classification according to the period of return of the financial source: 
  
  
  • Short-term funding sources. When the return period is less than the year; For example, vendor credit, bank loans, etc.
    
    
  • Long-term funding sources. When the return period is higher than the year; For example, long-bond loans and borrowings. Also when they have a deadline of undetermined or indefinite demand in time, as the company's own resources: capital and reserves.

• Classification according to they have a source external to the company either internally generated by its normal activity:
   
  • Internal financing. The undistributed profits (reserves) and shares depreciation and provisions.
    
    
  • External funding. Equity, loans, appropriations for the operation of the company, etc.

• Classification depending on if the funding media belong to the owners of the company either belong to people outside the company:
  
  
  • Their own means of funding. As the capital and reserves.
    
    
  • Other means of financing. As loans, credits and loans of all kinds, whether short-term or long-term.

• Classification according to how to obtain resources:
  
  
  • Spontaneous funding sources. They are which arise from the deferrals of payments of debts incurred as, for example, invoices to pay suppliers within 30 days or accumulated funds of income by IVA until the time of the liquidation. In this case the company does not conduct any type of contract for the use of these funds.
    
    
  • Negotiated funding sources. They are contractual in nature and, therefore, do not occur spontaneously. Examples of such sources include credits and loans that the company hires.