Sources of funds - Senior High Approach

1. Sources of Funds
FOR BUSINESS OPERATIONS
leahmaycabugao

2. Short Term
Funds

3. What are short term funds and
where are they used?
• Short term funds
are used for
business
operations’ working
capital.
e.g. financing
accounts receivable
and inventory

4. Funding Working Capital
• What is working capital?

5. Short term debt
is usually a one-year loan or less.

6. What are long term funds and
why do companies need Long-term
funds?
Long term
funds
are usually used for start-up business
requirements, capital expenditures or
business expansion for existing businesses.

7. Corporate Set-up
Long term funds
Debt
Equity from
Investing
Public

8. Debt

9. Banks
• What is a bank?

10. What are the classification of
Banks according to the
services they offer and their
clients?

11. NON BANKS
What are the non bank institution
that can finance the company?

12. Part 2

13. Lending happens when the owner of a
property or money allows another party the
use of the property or money

14. The payment of the use of property
or money is called interest.

15. Promissory Note a document that
connotes a promise to pay back the owner
for the use of the property or cash.

16. Debtis the obligation to
pay back property or cash
borrowed in accordance to an
agreement, this may be in
form of notes, bonds or
mortgages.

17. A credit is a loan or money
extended to a person or business in
exchange for a return.

18. •Credit Analyst
They hold the important role of analyzing the
financial track record of the person or the
business that borrows, as well as
transactions

19. What affects
credit ratings?

20. Ability to repay the loan
•This mainly focuses on the security of
the person’s job, business and/or the
security of the company that employs
you.
•This is to take a look at the condition of
the borrower.

21. Does he have the ability to
pay back the loan borrowed?

22. Character of Borrower
•Are youtrustworthy?
•Do youhave history of
trouble withthe law?
•Willhe prioritizedebt
payments or delaythem?
I just look like a
gangster but I pay
may debts

23. Capacity to pay the loan
Does he holda stablejob
or have a stable source of
income if he is in business?
What are the other sources
of income andwhat are the
current debts?

24. Capital and Personal
Assets
Do asset exceedliabilities?
Will savings and the value of property be able to
pay for all debts?
You know
I’m rich,
right?

25. Collateral and Size of
Business Assets

26. Credit Bureau
This is the agency that
gathers information about the
history of the borrower and
sells the information for a
fee.

27. What is insolvency?
Insolvency is
the inability to
pay debts on
time when they
are due.
Insolvency Bankruptcy

28. It is insufficiency of
cashflow and is temporary.
It is a matter
of timing.

29. What is bankruptcy?
This is a legal process
wherein assets of a
debtor are distributed
to creditors to be able
to pay his debts.
This also includes a plan to pay creditors
on installment basis.

30. DECLARING BANKRUPTCY SEVERELY
DAMAGES ONE’S CREDIT RATING.

31. What is your personal
net worth?
• Your net worth is the value of your assets,
cash, savings, real estate, cars, stock, bonds,
jewelry collection, insurance and art collection.

33. Personal Budget
helps you track your financial
assets and financial activities.

34. A successful and effective
budget will have the
following:
 Information based on passed spending
and expectation.
 No single expense, rent, utilities should
not consist of 50% of your net income.
 Must be flexible for modification if
important considerations change (i.e. income,
marital status, new spending habits, new medical expenses)
 Easy access any time

35. What affects your personal
Buying Decisions?
• Personal Values

36. • Available time for research

37. •Take home pay

38. • Access to the product/service

39. • Benefits of a brand

40. Loan Amortization
and Loan
Application Process

41. Lending
This is where banking earns and pays
his employees, whose salaries, in turn,
are reserved for several purposes

42. What are the mechanics
of lending,credit, and
how does the loan
application process work?

43. What informationwillwe putthatthe banks needs to
know before he is granted a loan?

44. Personal Loan
• What is your age?
• What is your occupation?
• Where do you live?
• How many cars do you
have?
• How many children do you
have?
• What is your Business?

45. Business Loan
• What is the nature of the business?
• How long has the business been in operation?
• How much revenues accrued in the last three
years?
• How much were profits for the last three years?
• What is the size and value of the business?
• What is the size and value of the properties of
the business?

46. YOU
sign/pass pertinent papers
forward
application
form
CREDIT
OFFICER
forward application form
asses the credit
paying ability
request for loan approval
CREDIT
COMMITTEE

47. Credit Committee
• This group of officers represents the financial
institutions, creditors and/or investors that have
claims on a company that is in financial difficulty
or bankruptcy

48. Credit Rating
are a way to formally
evaluate the credit
history of a person or
a company and that
includes a forecast of
its capability to repay
its obligation.

49. Credit Analyst
• The credit analyst evaluates statistics and
analyses corporate records including:
1. Payment plans
2. Savings data
3. Payment history
4. Purchase activity

50. 5 C’s of Credit