Sources of Funds

●      Export-Import Banks − These banks provide two types of loans − Direct loans to foreign buyers of exports, and Intermediary loans to responsible parties, such as foreign government-lending agencies which then re-lend to foreign buyers of capital goods and related services.

●      With-in company loans − New companies raise funds through external sources, such as shares, debentures, loans, public deposits, etc., while an existing firm can generate funds through retained earnings.

●      Eurobonds − International bonds are denominated in a currency of non-native country where it is issued. This is good in providing capital to MNCs and foreign governments. London is the center of the Eurobond market, but Eurobonds may be traded throughout the world.

●      International equity markets − International businesses can issue new shares in a foreign market. Shares are the most common tool for raising long-term funds from the market. All companies, except those that are limited by a guarantee, have a statutory right to issue shares.

●      International Finance Corporation − Loans from specialized financial institutions and development banks or from commercial banks are also tools for generating funds.

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