Small Firm Financing

Financing a small firm can be achieved in three ways. The most preferable but at the same time the least likely is self financing from retained earnings, otherwise, the firm will have to resort to either one of the two following financial markets. Debt capital and equity capital ( which strictly speaking is the same as retained earnings, both having their advantages and disadvantages. Only after 1979 did clearing banks start making loans with a maturity term …

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