In this method, the assets are purchased and the possession of goods is taken immediately but the payment is made in installments over a pre determined period of time. Normally, interest is charged on the unpaid price or it may be adjusted in the price.
Advances
Generally firms manufacturing industrial products having long production cycle prefer to take advances from their customers against their orders. It is the cheapest short term source of finance , thus enables firms to minimize their investment in working capital.
