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THE FINANCING DECISION
Introduction
• Finance represents the lifeblood that enables a
business to expand, grow, thrive, and sometimes,
merely survive. Raising finance is therefore a very
important aspect for any business enterprise. In
deciding on a form of finance, an enterprise should
consider several factors, including the following:
• suitability to the type of business and/or asset financed
• true cost
• impact on cash flow
• constraints associated with the form of finance,
including the effect of debt covenants
• impact on the overall risk profile
• how it pairs with existing finance
• availability
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