THE REALITIES ABOUT POULTRY The Modern Farm - The Realities About Poultry_Seco | Page 162

loans are issued for a period exceeding 10 years and are mainly used for funding the purchase of
major assets such as land, buildings or heavy-duty industrial machinery.
(2). Intellectual capital: “The real source of wealth and capital in this new era is not material things.
It is the human mind, the human spirit, the human imagination, and our faith in the future”- Steve
Forbes. Intellectual capital is just that: a capital asset consisting of intellectual material. To be
considered intellectual capital, knowledge must be an asset able to be used to create wealth. Thus,
intellectual capital includes the talents and skills of individuals and groups; technological and social
networks and the software and culture that connect them; and intellectual property such as patents,
copyrights, methods, procedures, archives, etc. It excludes knowledge or information not involved
in production or wealth creation. Just as raw materials such as iron ore should not be confused with
an asset such as a steel mill, so knowledge materials such as data or miscellaneous facts ought not to
be confused with knowledge assets.
(3). Equity: A poultry farmer can start his or her poultry farm using his or her own sources of funds
(or money) such as personal income, savings, etc. This is what is referred to as equity (or owner’s
equity).
(4). Supplier’s credit (or trade credit): Trade credit is a form of short-term financing common to
almost all businesses. In fact, it is the largest source of short-term funds for business firms
collectively.
In an advanced economy, most buyers are not required to pay for goods upon delivery but are
allowed a short deferment period before payment is due. During this period, the seller of the goods
extends credit to the buyer.
Because suppliers generally are more liberal in the extension of credit than are financial institutions,
small companies in particular rely on trade credit.
Some people begin business using goods that have been supplied on credit. At times it is referred to
as trade credit, i.e. credit that a customer gets from suppliers of goods and services in the normal
course of business. The buying firm does not have to pay cash immediately on purchases made.
That is, it uses the sales to pay the suppliers but remains with the profit realized on sale.
(5). Borrowing from friends and relatives (or relying on family contribution): An individual
seeking to start a poultry farm can also borrow from friends and/or family members. Besides, family
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