Question

Amongst the following which is not a short term means of raising capital?

• A. Loans from financial institutions
• B. Bill of exchange
• C. Promissory note
• D. None of the above

Answer 1

Answer: (A)

Loans from financial institutions

Financing can be taken by the organization depending on the requirement. Funds can be raised for short term and long term purposes.

Funds which are required for the day to day operations i.e. working capital requirement is considered as short term funds.

Funds which are require to create the fixed assets in the business are usually taken for a longer duration. These kind of capital is provided by the financial institutions.