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ECON 1000 (235)
Lecture

ventures 3.docx

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Department
Economics
Course
ECON 1000
Professor
Tamy Superle
Semester
Fall

Description
Other forms of finance provided in addition to venture capitalist equity includeClearing banksprincipally provide overdrafts and short to mediumterm loans at fixed or more usually variable rates of interestMerchant banksorganise the provision of medium to longerterm loans usually for larger amounts than clearing banks Later they can play an important role in the process of going public by advising on the terms and price of public issues and by arranging underwriting when necessaryFinance housesprovide various forms of installment credit ranging from hire purchase to leasing often asset based and usually for a fixed term and at fixed interest rates Factoring companiesprovide finance by buying trade debts at a discount either on a recourse basis you retain the credit risk on the debts or on a nonrecourse basis the factoring company takes over the credit risk Government and European Commission sourcesprovide financial aid to UK companies ranging from project grants related to jobs created and safeguarded to enterprise loans in selective areas Mezzanine firmsprovide loan finance that is halfway between equity and secured debt These facilities require either a second charge on the companys assets or are unsecured Because the risk is consequently higher than
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