Firms have three general types of fund sources available to them: internally generated cash and short-term or long-term funds from external sources. External funds can come from lenders or investors. Lenders typically loan money in the form of commercial bank loans for short to medium term durations, or private bonds for the long term. Investors provide money to the company by buying the securities that it issues in the financial markets. These (generally) tradable securities can be either equity or debt, debt being the preferred choice.

The rate of use of these various options changes greatly from country to country. German, French, and Japanese companies prefer to borrow funds from banks, and their U.S. and British counterparts would rather sell securities in financial markets. Moreover, all countries are experiencing a trend that is drawing companies away from securities from financial institution and towards securities from other companies.

Financial systems usually fall into two categories: the Anglo-Saxon model and the Continental European Model. The Anglo-Saxon model is a market-oriented system that can be found in the United States and the United Kingdom, and the Continental European Model is a bank-centered system found in Germany, France and Japan.

Commonly found in Japan are Keiretsu, or sets of companies with business relationships, often in the form of shared board members. The companies belonging to a single Keiretsu are centered around a large bank and often own equity in the other companies belonging to that Keiretsu. Keiretsu have both vertical and horizontal tendencies, much like vertical and horizontal integration in general business growth. These business relationships allow companies to receive goods or borrow money at low rates, since the other company or bank taking part in the transaction has ownership in the first company and therefore has a stake in its continued success.

References:

http://www.investorwords.com/2691/keiretsu.html

http://searchcio-midmarket.techtarget.com/sDefinition/0,,sid183_gci518852,00.html