Bhuvan Garments received double the estimated orders during the festival season. Advise what sources of finance can be used?

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Solution

Dear Student,
Bhuvan Garments requires fund for short term to meet its working capital requirement. So, Trade credit is best source to raise finance when manufacturer is granted credit from supplier of raw materials, inputs, spare parts etc. The supplier allow their customer to pay their outstanding balance within a credit period. Generally the duration of trade credit is 3-6 months. In the given case, Bhuvan Garments needs finance for festive season only.

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