Because of festive season Bhuvan Garments received double orders. Advice the company the various sources of finance, which can be used to raise necessary finance for this purpose.

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Solution

Various sources of finance which Bhuvan garments can use to meet festive season demand (working capital) are :

(a) Trade credit-Means credit extended to business by its suppliers to purchase inventories or services without making immediate payment.

(b) Factoring-Is a financial services under which factor provides services like : (i) discounting of bills and collection of clients debts and; (ii) providing information about credit worthiness of prospective clients.

(c) Bank overdraft-It is an management under which the businessman having current account in the bank can withdraw specified amount over and above his deposits for short period.

Cash credit commercial paper, etc are the other sources which can be used to meet working capital requirement.

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