It is required for investment in fixed assets like land, building, plant and machinery, and for financing expansion programmers. Long-term funds are raised for a long period, say, more than five years. They are generally invested in fixed assets. The sources of long-term financing are : (a) shareholder; (b)debenture holders; (c) financial institutions; and (d) retained earnings.

The amount of long-term finance required depends on the type of business and the fixed assets required. For finance, a big steel, cement or chemicals factory involves heavy investment on building, machinery and equipments. A small factory producing garments or a small worship repairing electrical goods will require as small investment in fixed assets. Traders generally require lesser amount for long-term investment as compared with there equipments of manufactures.

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