Merchant Banking

In banking, a merchant bank is a financial institution

primarily engaged in offering financial services and
advice to corporations and wealthy individuals on how
to use their money.Merchant Banking is a combination
of Banking and consultancy services. It provides
consultancy to its clients for financial, marketing,
managerial and legal matters. Consultancy means to
provide advice, guidance and service for a fee. It helps
a businessman to start a business. It helps to raise
(collect)finance. It helps to expand and modernize the
business. It helps in restructuring of a business. It also
helps companies to register, buy and sell shares at
the stock exchange.
FUNCTIONS OF MERCHANT BANKING

DEFINITION of 'Venture Capital'

Money provided by investors to startup firms and small businesses with perceived longterm growth potential. This is a very important source of funding for startups that do not
Have access to capital markets. It typically entails high risk for the investor, but it has the
potential for above-average returns. Most venture capital comes from a group of wealthy
investors, investment banks and other financial institutions that pool such investments
or partnerships. This form of raising capital is popular among new companies or
ventures with limited operating history, which cannot raise funds by issuing debt.
Factoring is a financial transaction and a type of debtor finance in which a
business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at
a discount.[1][2][3][4] A business will sometimes factor its receivable assets to meet its present and
immediate cashneeds.[5] [6] Forfaiting is a factoring arrangement used in international trade
finance by exporters who wish to sell their receivables to a forfaiter.[7] Factoring is commonly
referred to as accounts receivable factoring, invoice factoring, and sometimes accounts
receivable financing. Accounts receivable financing is a term more accurately used to describe a
form of asset based lending against accounts receivable.[8]

Commercial paper is a money-market security issued (sold) by large corporations to obtain

funds to meet short-term debt obligations (for example, payroll), and is backed only by an
issuing bank or corporation's promise to pay the face amount on the maturity date specified
on the note.An unsecured, short-term debt instrument issued by a corporation, typically
for the financing of accounts receivable, inventories and meeting short-term
liabilities. Maturities on commercial paper rarely range any longer than 270 days. The
debt is usually issued at a discount, reflecting prevailing market interest rates.