Financing Options Essay Example | Topics and Well Written Essays - 2250 words

Financing Options - Essay Example41, no 3, 2001, pp. 121-140). In this paper, various financial options available in the UK economy for large purchase will be evaluated and the issues associated with much(prenominal) options will also be analysed.Bank loans are considered to be the most reliable showtime of financing whatever large purchase. Bank loan is an agreement in which the borrower is provided with full or uncomplete bar of the money required for purchasing certain assets from a large number of commercial banks such(prenominal) as HSBC, Barclays, Standard Chartered and Royal Bank of Scotland as well as cooperative banks such as Tesco Bank, Sainsburys Bank etc. available in the economy. Such sum of money is provided with an agreement of repaying the article of belief amount after completion of a stipulated period of time. Moreover, the borrower is subjected to pay the fixed or variable amount of liaison rate, as applicable, on the principle amount taken as loan (M. Cagl ayan and A. Rashid, The Response Of Firms supplement To Risk Evidence From Uk Public Versus Nonpublic Manufacturing Firms, Economic Inquiry, Volume 5, No. 52,2013,pp 341363).Bank loans can be of secured and unsecured. Unsecured loans are those source of capital in which fund can be quickly availed without any obligation of collateral. Such loan is provided, depending upon the current financial position of the borrower and his reputation in the market. However, in graphic symbol of large purchases, loan is always made secured by involvement of certain assets such as hold property of the borrower which is used as collateral. The lenders hold the collaterals till the tenure of the loan. If the borrower fails to repay the loan or the interest payment within the stipulated time, the banks are entitled to acquire the right of ownership of the collateral. Secured loan is considered to be the trump out option for accumulating large amount of money. Mortgage loans are the most prominent example of secured bank loans (I. K. Nassr and G. Wehinger,