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Top Two Types Of Finance.

Classification of financing Types of Finance Business to finance is a broad subject. Here the size, shape and nature of the business, non-business, government, private, autonomous, semi-autonomous etc. institutions are different, as are the sources of finance.

A brief discussion of the class types of finance is given below:

First Types of finance is Base of proprietorship finance.

Types of Finance

1. Base of proprietorship finance:

There are two types of financing in terms of proprietorship finance and ownership.

A. Public Finance:

Public finance and money are needed to keep the state apparatus active. A government bears all the expenses of the state. For this, government treasury, government-run and controlled industries, trade and commerce, borrowing, grants, income surplus of various departments, collection of fines etc. are used. Public welfare is seen as one of the objectives in the public economy.

B. Private Finance:

The financing activities that are usually conducted and controlled at the private level can be called private finance. There is no direct role for government agencies here. An individual, an individual class and an organization personally conducts activities ranging from identifying the source of money to collecting and disbursing it. It can again be divided into three parts according to the nature of the collector.

i. Personal Finance:

A financial transaction between an individual or a group of individuals. So there is personal funding. It can be daily, short-term or even one-time.

ii. Business Finance:

Business finance is the financial management of various non-governmental organizations. Any financial functions of the organization such as purchase-sale, banking, insurance, production, distribution, etc. are covered under this management. There are 3 types of financing. Namely: 1, short, 2. Medium and 3. Long term.

iii. Finance for non-profit firms:

The financial activities of a non-profit organization that works for the purpose of ensuring social services and not for profit are covered by such financing. Donations, grants, fees, loans, etc. are the main sources of income for such organizations. Such organizations can run business activities for the welfare of the members.

Second Types of finance is Bases of Finance Of Sources.

2. Bases of Finance Of Sources:

There are three types of sources of finance and sources of finance. Such as

a. Internal Finance:

Internal financing is the financing activities that run from internal sources such as paid up capital of entrepreneurs, various reserves, profits, etc.

B. External finance:

External finance is the type of financial activity that exists in an organization other than external finance. Such as- commercial book loan.

C. Structural Financial Bases:

The structure of the source varies. Basically all types of structures can be divided into two parts.

  • i. Institutional,
  • ii. Informal.

i. Institutional Finance:

Institutions that have been conducting and controlling financing activities on a legal basis are called Institutional Finance. Such as- banks, insurance, leasing institutions, stock market, special financial companies. About 90 percent of the funding for such organizations comes from institutional financing authorities.

ii. Non-Institutional Finance:

Any other source other than the above institutional sources such as personal loans, sale of assets and mortgages, etc. is called informal financing. Owners or moneylenders, relatives, friends, neighbors, mortgagors, etc. are involved in such financing.

It is evident from the above discussion that people of different professions, institutions of different natures, governments and NGOs are involved in financial activities for various purposes. Some pay and some accept. A financial transaction occurs. Financial management activities are created with the intention of keeping financial transactions dynamic.

From individuals to governments and institutions of various natures are doing their own or legal. Someone is taking it from an NGO. Small loans, some for short term such as for one year or less, some for medium term such as for less than one to ten years, some for long term ten or more. Types Of Finance Now may be clear you. If any quarry dont forget to comment.