The role of Investment Trusts in the capital market
An Association of Investment Trust Companies (AITC) case study

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Page 2: The need for funds

Businesses sometimes need funds above the income they get from trading to help them grow and also to carry out their day-to-day trading activities. Business acquire funds from several sources:

  • shareholder capital - where investors give the company money in exchange for shares (long-term)
  • loan capital (medium-term)
  • bank overdrafts and trade credit (short-term).

This study concentrates on longer-term funds. Without long-term funds, businesses would struggle to buy expensive capital equipment, build new premises, expand into foreign markets, or acquire other businesses.

Association of Investment Trust Companies (AITC) | The role of Investment Trusts in the capital market
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