Hello WDF81, It is " can someone correct this statement". Mortgage: It is an externally generated source. If you will expand your business for example and you need lots of money , you can ask a bank for a loan. The bank could accordingly pledge your house or your ( production hall ??**) for the repayment of the loan.This art of financing is a long term loan. ** What do you mean by "production hall"? Trade credit: This is considered short term financing. In case you can't pay instantly for purchasing certain materials, you make a contract to pay at a certain maturity date for example after half a year when you have sold your finished goods ( By the way you have to pay whether you sold the finished goods or not) .This loan is also externally generated. ** The payment will exceed the present value by a certain rate of interest determined by the lender. Your definition of "depreciation" is quite unclear and vogue ,so I will have to make more changes to that text. Depreciation: This source is internally generated from within the firm. If a firm buys a new asset an amount is deducted from the gross profit through bookkeeping to compensate for the reduced value of the fixed asset. This reduction covers a certain period of time, after which the depreciation reserve can buy a new asset.

MORTGAGE: This is an externally-generated source. For example, if you want to expand your business, and you need a lot of money, you can call a bank for a loan. The bank will secure the loan by taking out a lien on your house or production facility. This art of financing is done over a long term. TRADE CREDIT: This is short-term financing. The way it works is that, after receiving materials from a a supplier, you make a contract with him to pay the invoice at a later date. For example, six months later, after you have sold the finished product. This type of financing is also externally generated.