Give limitations of institutional finance.

Solution

Limitations are as follows :
(1) The concern requiring finance from special financial institutions has to submit detailed project report. A number of formalities and documents are involved.

(2) Many desiring concerns may fail to get assistance for want of security and other conditions laid down by these institutions.

(3) Sometimes, these institutions place restrictions on the autonomy of management. They lay down a convertibility clause in loan agreements. In some cases, they insist on the appointment of their nominees on the Board of Directors of the debtors company.

Some More Questions From Sources of Business Finance Chapter

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Sources Of Business Finance

Give limitations of institutional finance.

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