Explain The Sources Of Medium Term Finance.

Advantages of medium term finance

The sources of long term business financing

On the basis of terms of duration, the business finance is classified into three types a medium term of finance is that.

Medium term finance:
To finance a business for a period of more than a year but less than 10 years is called intermediate financing. Such type of finance is obtained for expansion and modernization of existing plant. It is also needed for the purchase of assets, costly raw material. It may be used to meet the cost of maintenance, repair, improvement and betterment of plant. Lastly, it can be used to repay the short term loans.

Sources of medium term finance:

1. Commercial banks: Commercial banks provide medium term finance to traders and     manufacturers against security.
2. Insurance companies: The insurance companies also provide loan to manufacturers against the security of assets.
3. Industrial development bank of Pakistan: I D B P was established in 1961 to provide medium and long term finance to establish and expand industries.
4. Pakistan industrial credit and investment corporation (P I C I C): This Corporation was set up in 1957 and is one of the major sources of providing finance for medium and long term projects. It also provides finance in technical and managerial fields. It also provides loans for working capital.

Hey :) wit carina in business studies, no idea wat this means this makes me LOL :)