Direct financing is a financing method without the intervention of financial intermediaries. In this financing mode, in a certain period of time, the capital surplus unit will provide monetary funds to the demand unit through the securities directly issued with the capital demand unit. Commercial credit, stocks and bonds issued by enterprises and direct loans between enterprises and individuals all belong to direct financing.
Direct financing is a financing mechanism with stocks and bonds as the main financial instruments. The direct financing market, also known as the securities market, is the place where the fund supplier and the fund demander directly finance through financial instruments such as stocks and bonds. Direct financing can absorb as much as possible.
Social hot money directly invests in the production and operation of enterprises, which makes up for the shortage of indirect financing.
The types of direct financing include commercial credit, state credit, consumer credit and private personal credit.
Tools for direct financing: mainly commercial bills and direct loan certificates, stocks and bonds.