(i) Shares :
(1) Corporate enterprises generally obtain capital mainly from share capital which is divided into small units called shares. Each share has a nominal value.
(2) The Indian Companies Act, 2013 describes a share "to be a share in the share capital of the company".
(3) The person holding a share is called shareholder who has the Interest in the Assets and Profit of the Company.
(4) There are two types of Shares namely Equity Shares and preference shares.
(ii) Debentures :
(1) Debentures are important instrument for raising long term debt capital. A company can raise funds through issue of debentures which bear a fixed rate of Interest.
(2) The individual or person subscribing to debentures is called debenture holder.
(3) An enterprise raising funds through debenture has to pay interest at the stipulated period.
(iii) Retained Earnings :
(1) Retained earnings refer to the process of retaining a part of net profit year after year and re-investing them in the business. It is also termed as ploughing back of profits.
(2) A profit making company would retain a portion of the net profit in order to finance its growth and expansion in near future.
(3) It is described to be the most convenient and Economical method of Finance.
(iv) Public Deposits:
(1) Under this method companies invite public deposits by giving advertisement in the media.
(2) It offers deposit scheme for a longer tenure. Person interested in making public deposit has to undergo a simple formality.
(3) The interest rates offered by companies on public deposits are relatively higher than the bank.
(v) Long term loan from commercial banks:
(1) Commercial banks are important sources of raising Business Finance for various purposes as well as for different time periods.
(2) Banks in modem times offered long tenured loans for a period beyond 5 years.
(3) The long term loan taken from banks can be repaid either in instalment or one lump sum.
(4) Banks provide long term loans on the security of the Assets of the business firms.
(vi) The loans from Financial Institutions:
(1) The central and state government have established various financial institutions in India to provide Finance Business Enterprises for a longer period.
(2) These institutions aims at promoting the Industrial Development of a country.
(3) They mainly provide larger funds for longer period for Financing Expansion, re-organisation and modernisation of an enterprise. They allow longer repayment period to repay the loan.

(i) Cost:
Business enterprises have to analyse the cost of mobilising and utilising the funds.
For Example: Interest rate is lower for Public deposits, Debentures, Term loans, etc.
(ii) Financial Capacity of the Firm :
(1) Financially sound enterprises have capacity to pay interest promptly and return the Capital at the stipulated time.
(2) Such enterprises can go for borrowed source. On the other hand, if the Firm is not Financially stable, it has to depend on owned source of fund.
(iii) Forms of organisation:
(1) The choice of source of fund depends on the form of organisation. Sole proprietor and partnership firm cannot issue shares and debentures.
(2) They have to depend on short term sources like Bank Finance, Leasing, Hire purchase, factoring, etc. On the other hand companies, Government organisations and co-operative organisations mobilise funds both from long term sources like Shares, Debentures, Public Deposits, etc. and from short term sources.
(iv) Time Period:
(1) The period for which Business Finance is required determines the suitable source.
(2) For instance, where funds required are for shorter period bank finance like overdraft, Cash Credit, Bill discounting, mortgage, pledge, leasing hire purchase, factoring and so on are suitable sources.
(3) Funds required for long term sources like shares, debentures, public deposits, etc. and from short term sources.
(v) Risk Factor:
(1) Owned funds do not invite any risk while using borrowed funds entails a lot of risk.
(2) The probable default in paying interest and capital may lead to the liquidation of business enterprises besides damaging the reputation of the business concern in the business world.
(vi) Control:
(1) Equity shareholders are real owners of corporate enterprises. They exercise complete control over the management of the company.
(2) If the existing shareholders do not like to lose their control, they must not issue more Equity shares to supplement the Financial resources.
(vii) Stage of Development:
(1) New business, enterprises finds it hard to mobilise Business Finance than an established firm.
(2) Therefore, it may have to rely on owned sources in the initial stage.
(3) Once the Business Enterprise has established itself in the Business world, they can tap borrowed source of funds and offer its Assets as security there for.
(viii) Credit worthiness of the Firm:
(1) Some sources of funds like debentures and creditors require the business firms to mortgage the Assets.
(2) This hurts the credit worthiness of the business concern in the Financial Market.

The following are the main features of Business Finance :
1. Business finance comprises of all types of funds namely short, medium and long-term used in business.
2. All types of organisations namely small, medium and large enterprises require business finance.
3. The volume of business finance required varies from one business enterprise to another depending upon its nature and size. In other words, small and medium enterprises require relatively lower level of business finance than the large-scale enterprises.
4. The amount of business finance required differs from one period to another. In other words the requirement of business finance is heavy during the peak season while it is at low level during the dull season.
5. The amount of business finance determines the scale of operations of business enterprises.

The following are the importance/significance of Business Finance:
1. A firm with adequate business finance can easily start any business venture.
2. Business finance helps the business organisation to purchase raw materials from the supplier easily to produce goods.
3. The business firm can meet financial liabilities like prompt payment of salary and wages, expenses, etc., in time with the help of sound financial support.
4. The sound financial support enables the enterprises to meet any unexpected or uncertain risks arising from business environment efficiently. For example economic slowdown, trade cycles, severe competition, shift in consumer preference, etc.
5. Sound financial position empowers the enterprise to attract talented manpower and introduce latest technology.