Module 2.2. Sources of Funds for ICT Companies

Having idea for a project is an important steps in business formulation. Determining How to finance the project idea is another issue of importance

Chapter Learning Objectives
This chapter aims at introducing to the learner the main sources of financing ICT investments and what are the returns to the various sources of financing.

Chapter Learning Outcomes
At the end of this chapter, the learner should understand equity and bond financing and what is the implication to the capital structure of the firm.

Sessions Covered in the Chapter are:

Session 1: Share Capital (Equity) Financing for ICTs
Session 2: Bond (Debt) Financing for ICTs.
Session 3: Mezzanine Financing
Session 4: Other Sources of Financing (leasing)

Introduction
In any business, there are three sources of business finance. These are;

1. Equity finance
2. Debt finance
3. Internally generated funds

It is thus important for the regulator to know the sources of business finance so as to

• Determine the risks associated with the various sources of finance
• Find out the ways the agents of the company i.e. the management to finance these sources.