Financial Times Handbook of Corporate Finance, 2nd Edition

15

DEBT FINANCE AVAILABLE TO FIRMS OF ALL SIZES

IntroductionContrasting debt finance with equityBank borrowingOverdraftTerm loansRevolving credit facilityTrade creditFactoringHire purchaseLeasingBills of exchangeAcceptance credits (bank bills or banker’s acceptance)ConclusionWebsitesNotes

Introduction

For many firms, especially smaller ones, a combination of overdrafts and loans, trade credit, leasing and hire purchase make up the greater part of the funding needs. Large companies have access to stock markets, bond markets and syndicated loan facilities. These are often closed to the smaller firm, so, to pursue their expansion programmes, they turn to the local banks and the finance houses as well as their suppliers for the wherewithal to ...