The Decision on Firm Funding

Ilie Răscolean () and Ileana-Sorina Rakos ()
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Ilie Răscolean: University of Petroşani, Romania
Ileana-Sorina Rakos: University of Petroşani, Romania

Annals of the University of Petrosani, Economics, 2016, vol. 16, issue 2, 117-128

Abstract: Microeconomic funding decision is complex and must ensure the selection of sources of financing at the lowest cost of procurement, but other economic criteria and constraints to which a company is subject. We distinguish, depending on the destination of the financing sources, two categories: short-term financing sources to cover the needs of the exploitation cycle and medium and long-term funding sources for investment financing. Depending on sources of origin, sources of funding are grouped into equity and borrowed sources. The paper presents the situation of a company that needs borrowed sources of shortterm loans to finance the needs of the operating cycle. Depending on the offer, the bank accesses a short-term loan package considered advantageous for the development and development of the specific activity.

Keywords: financing decision; sources of finance; equity; borrowed financing sources; operating debts; bank loans; discount; factoring; lump-sum; leasing; bond issues; credit line (search for similar items in EconPapers)
JEL-codes: G30 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:pet:annals:v:16:y:2016:i:2:p:117-128

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