Sources of International Financing

Sources of International Financing

Sources of international financing for a company can be broadly categories into lending from the bank, issuing bond in the international bond market, and issue share in the international equity market

1.    Lending from the bank

Company may get finance from the international banks. This is option is available both to large scale companies (multinational companies), and relatively small companies. Lending from the bank is relatively easy way of raising finance than issuing bond and shares in the international market.

2.    International Bond Market

Companies can issue bond in the international bond market. The most famous market in this regard is Eurobond market. International bond market is used by the companies for arranging a large amount of capital, which may not be raised by bank borrowing.

3.    International Equity Market

Companies can issue shares in the international market. The London stock exchange and New York stock exchange are the two famous international equity markets for excising this option. International equity raising involves a lot of formalities like permission of regulator, permission of stock exchange and compliance with listing regulation etc.