Intermediaries in Funding Essay Example | Topics and Well Written Essays - 500 words

Intermediaries in Funding - Essay Example However, growth is directly associated to the introduction of financial asset or capital. The selection of right intermediary to obtain finance is not a straight forward process though, it is universally agreed that a commercial bank may serve that purpose well. Banking institution provides a certain amount of confidence and trust both to borrowers and lenders, due to the legal and ethical framework that normally regulates it. Bank provides loan as working capital to small and medium enterprises but also also provides some elements of institutionalised flexibility which greatly facilitates the concerned business as "intermediary are usually less risky"( Schenk. n.d). Many other intermediaries are available to obtain working capital for businesses. However, certain hindering factors come to surface seriously especially when it comes to guaranteed resettlement of borrowed capital and certain companies will have limitations depending on the stage they have reach in finance cycle. The extent of growth will influence thus the relationship with financial institutions and other s. The larger the companies the bigger are the trust customer and other institutions have in them mainly when there is joint venturing during which occurs mostly during diversification. Businesses at large are faced with extreme internal and external challenges.