In a narrow sense, financing is the behavior and process of raising funds for enterprises.
That is, according to the company's own production and operation situation, capital possession situation and the needs of the company's future operation and development, through scientific prediction and decision-making, the company adopts certain methods to raise funds from the company's investors and creditors through certain channels and organize capital supply to ensure the company's normal production needs and financial management activities.
Broadly speaking, financing is also called finance, that is, the financing of monetary funds and the behavior of the parties to raise or lend funds in the financial market in various ways.
"New palgrave Dictionary of Economics" explains financing: financing refers to the monetary transaction means to pay for purchases that exceed cash, or the monetary means to raise funds for the acquisition of assets.
Extended data:
Common forms:
I. Bank loans
Banks are the main financing channels for enterprises. According to the nature of funds, it is divided into three categories: working capital loans, fixed assets loans and special loans. Special loans usually have specific purposes, and their loan interest rates are generally favorable. Loans are divided into credit loans, secured loans and discounted bills.
Second, stock financing.
The stock is permanent, has no expiration date, does not need to be returned, and has no pressure to repay the principal and interest, so the financing risk is small. The stock market can promote enterprises to change their management mechanism and truly become a legal entity and market competition subject with independent operation, self-financing, self-development and self-restraint. At the same time, the stock market provides a broad stage for asset reorganization, optimizes the organizational structure of enterprises and improves the integration ability of enterprises.
Third, bond financing.
Corporate bonds, also known as corporate bonds, are securities issued by enterprises in accordance with legal procedures and agreed to repay the principal and interest within a certain period of time, indicating that there is a creditor-debtor relationship between the issuing enterprises and investors. Bondholders do not participate in the operation and management of the enterprise, but have the right to recover the agreed principal and interest on schedule. When an enterprise goes bankrupt and liquidates, creditors have priority over shareholders in claiming compensation for the remaining property of the enterprise. Corporate bonds, like stocks, are securities and can be freely transferred.
Fourth, financial leasing.
Financial leasing refers to the financing mode in which the lessor purchases the leased property from the supplier according to the lessee's choice of the supplier and the leased property, and provides it to the lessee for use, and the lessee pays the rent in installments within the time limit stipulated in the contract or contract.
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