Means of financing-

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There is no ideal pattern concerning means of financing for a project. The means of financing is determined by a variety of factors and considerations like magnitude of funds required, risk associated with the enterprise, nature of industry, prevailing taxation, laws etc.

The following are the sources of finance:

–          Share capital

–          Subsidies

–          Long term borrowing (financial institutes / banks)

–          Loans from friends and relatives

–          Retained earnings

Financial institutes specify certain debt equity ratios and promoters will have to raise own finance to match these ratios.

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