External Sources of Finance
When the firm obtain finance from sources which are external to the firm.
Bank loan (Mortgage Loan) - When a firm obtain a loan from a bank keeping an asset as the security or collateral it is called as mortgage loan.
Venture Capital - It is a financial aid provided by an investor to an entrepreneur who has a business an business idea, after identifying the potential success of the business idea the risk will be bourn by the venture capitalist and they will share the profit when the business is success.
Share - is the share of share capital. Shares can only be issue by limited company.
This is suitable for firms which needs a huge amount of finance.
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