Is it easier for joint-stock companies to raise funds than other companies?

Joint-stock companies are indeed easier to raise funds than other companies, but not as good as listed companies. After all, it is normal that other companies have better financing than joint-stock companies. If the joint-stock company is with private enterprises and state-owned enterprises, it is more difficult for private enterprises to raise funds. Enterprise financing refers to the movement process of financing with enterprises as the main body, which makes the supply and demand of funds between enterprises and their internal relations change from imbalance to balance.

Introduction to enterprise financing

Enterprise financing can be divided into direct financing and indirect financing according to whether there is financial intermediary or not. Direct financing refers to the financing that the unit with capital shortage negotiates directly with the unit with capital surplus without any financial intermediary, or through securities and joint ventures, such as corporate bonds, stocks, joint ventures and internal financing.

Indirect financing refers to financing activities through financial institutions, such as bank credit, credit from non-bank financial institutions, entrusted loans, financial leasing, project financing loans, etc.

The advantages of direct financing are relatively fast capital flow, low cost and few legal restrictions. The disadvantage is that the financing and investment skills of both parties to the transaction are high, and some of them need to meet each other before the transaction can be concluded.

Compared with direct financing, indirect financing can make full use of economies of scale, reduce costs, spread risks and realize diversified liabilities through financial intermediaries. However, direct financing is an indispensable means for modern large-scale enterprises to develop and raise funds, so the two financing methods cannot be neglected.