Give main advantages of institutional finance.

Solution

The main advantages of institutional finance are as follows :

1. Risk is minimised as well as capital is available for a longer period of time at relatively cheaper rates of interest. Special financial institutions provide underwriting and direct subscription facilities also.

2. Assistance is available for new companies when recourse to normal sources is impracticable or unprofitable.

3. As these institutions carry out a thorough investigations before granting assistance to a concern, relationship with them helps increase the credit worthiness of a company.

4. Loans and guarantees in foreign currency and deferred payment facilities are available for the import of required machinery and equipment.

5. The rate of interest and payment procedures are convenient and economical. Facilities for repayment in easy instalments are made available to deserving concerns.

6. Along with finance, a company can obtain expert advice and guidance for the successful planning and administration of projects.

Some More Questions From Sources of Business Finance Chapter

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Sources Of Business Finance

Give main advantages of institutional finance.

Some More Questions From Sources of Business Finance Chapter

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