Final answer:
Spontaneous financing refers to financing that arises during the natural course of business without special arrangements. It can include accounts payable and accruals, which are generated by a company's own operations.
Step-by-step explanation:
Spontaneous financing refers to financing that arises during the natural course of business without the need for special arrangements. It is also called self-liquidating financing because it is generated by the company's own operations.
For example, accounts payable and accruals are forms of spontaneous financing. When a company purchases goods or services on credit, it creates a liability (accounts payable) that will be paid later. The company can use these liabilities to finance its ongoing operations.
Factoring, equity financing, and debt financing are forms of financing that require specific arrangements or actions beyond the normal course of business.