Security Finance

What is Security Finance – Finance

Security Finance

If the finance is mobilized through the issue of securities such as shares and debenture, it is called security finance. It is also called corporate securities. This kind of finance plays a serious role in the field of deciding the capital structure of the corporate.

Characters of Security Finance

It consists of the following important characters:

  1. 1. Semi-permanent sources of finance.
    2. it’s additionally known as company securities.
    3. Security finance includes each share and debentures.
    4. It plays a serious role to choose the capital structure of the corporate.
    5. The compensation of finance is extremely restricted.
    6. it’s a serious part of the company’s total capitalization.

Types of Security Finance

It may be divided into two major types:

  1. Ownership securities or capital stock.
  2. Creditorship securities or debt capital.

Ownership Securities

The ownership securities also called capital stock, are commonly called shares. Shares square measure the foremost Universal technique of raising finance for the enterprise. Ownership capital consists of the following types of securities.

Creditorship Securities

Creditorship Securities knew as debt finance which means the finance is mobilized from the creditors. Debentures and Bonds are the two major parts of the Creditorship Securities.

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