External finance
External finance is any way in which a company raises financing other than using its own money. This commonly involves issuing company equity, such as selling stocks. It can also include taking out loans. Generally, raising external finance has a higher cost than internal financing.
There are two main ways for a firm to raise money. One is internal financing, which covers money generated by the business, most notably its annual profits. Internal financing can also include other methods, including selling a physical asset such as a building. The other way of raising money is external financing, which usually involves getting cash from an outside source without giving goods or services in return. Instead of giving up goods and services, a firm getting external finance will usually give up either debt or equity.
Foreign capital is attracted in direct investments, long-term loans, and placement of bonds on international markets to settle external payments and cover the balance of payments deficit. Among the various sources of external financing, state (official) and private sources are distinguished; some form debts, and others do not.
Lister J. What is External Finance? (2023, January 11). Smart Capital Mind. URL: https://www.smartcapitalmind.com/what-is-external-finance.htm
Звонова, Е.А. (2000). Международное внешнее финансирование в современной экономике. Москва: Экономика.