Under the financing conditions of the company, the total investment of the project can be divided into two parts. The first part is that the original non-cash assets of the company are directly used for construction projects, and in principle there is no need to participate in investment estimation or financing analysis. The second part is the investment that the construction drawing project needs the company to pay in cash, and the financing of investment estimation corresponds to this part of investment.
There are four sources of cash that the company can invest in construction projects: first, new investable share capital (expansion for short), second, original investable cash (cash for short), and third, the company's original non-cash assets.
In project financing, the problem is much simpler. In fact, project financing can be regarded as a special case of corporate financing. Because there are no original assets and liabilities of the enterprise, the source of funds for the total investment of the project is only composed of additional equity capital and additional debt funds.
In the above analysis, some basic concepts are involved and summarized as follows.
First, when building a project by project financing, there are many channels of funds, but the nature of funds is only the funds that the project does not need to repay, that is, equity funds, and the other is the funds that the project must repay, that is, debt funds.
Second, when financing projects, the concepts of self-owned capital and equity capital are the same. However, whether it is equity capital or debt capital, the concept of self-owned capital sometimes misunderstands the project and confuses the ownership of the project and the ownership of investors. For example, Company A invested 30 million yuan as the construction fund of limited liability company B, which is undoubtedly equity capital and self-owned capital for this project of Company B, but for the investors of Company A,
Third, in the case of enterprise financing, the concept of self-owned capital should be broader, including not only the expansion of equity capital, but also the improvement and change of the original assets of enterprises.
Because of this difference, in the financing analysis in the feasibility study, the company uses its own funds to finance, and the project uses equity capital to finance. When carrying out differential economic evaluation, it is uniformly called self-owned funds. Regarding the financing of debt funds, there is no difference between corporate financing and project financing.