What are the financing methods of construction companies?

I. Loan financing means applying for loans and project funds from different financial institutions or entities. The loan model has the advantages of convenient approval, simple procedures and the widest application. As long as they meet the loan conditions of commercial banks, they can apply for loan financing without additional administrative approval. Loan financing includes development finance, commercial bank loans and provident fund loan models. 1. 1 Development Finance The China Development Bank provides medium and long-term loans, effectively combines government policy support with market mechanism, and relies on the national credit and service strategy to give full play to the role of development finance in ensuring low cost and low profit, providing financing channels with lower cost and stable sources. 1.2 The contractor or project company of a commercial bank loan project raises funds by borrowing from a commercial bank. Its operation mainly includes four links: applying for a loan, examining and evaluating, signing a loan contract and repaying the principal and interest. Advantages are simple financing procedures and few links, and the qualification requirements for financing enterprises and project companies are lower than those for issuing bonds; The disadvantages are high financing cost, strict requirements for project capital and high commercial value. 1.3 housing provident fund loans in residential projects, there are also housing provident fund loan financing, and its operation mode is basically the same as that of commercial banks. The difference is that the provident fund management center only provides loan funds and does not issue loans by itself, but entrusts commercial banks to lend to construction enterprises. Second, the direct financing method of debt instruments is that the enterprise or project company undertaking the project obtains funds by issuing various financing debt instruments. The financing enterprise and investors form a direct creditor-debtor relationship through debt instruments, and the financing enterprise pays the principal and interest to the investors after the debt relationship expires. Direct financing of debt instruments can be divided into bond financing and asset-backed bill financing. 2. 1 bond financing construction enterprises or institutions authorized by the project company issue direct debt financing tools to raise funds. There are four common forms: corporate bonds, corporate bonds, medium-term notes and short-term financing bonds, among which the first three are very similar. Debt financing is restricted by many policies, usually by two aspects: one is the capital of the financing project, and the other is the cash flow of the project that can cover the principal and interest of the debt. Especially unprofitable projects. Under these two constraints, there are certain restrictions on the loan scale and access to large, low-interest and long-term loans. Most financing platforms fail to meet the issuance conditions and are easily restricted by macro-control policies (such as monetary tightening, monetary tightening). 2.2 Asset-backed bill financing refers to the way that construction enterprises or project companies issue asset-backed bills for financing. Asset-backed notes are debt financing instruments issued by non-financial enterprises in the inter-bank bond market, which use the cash flow generated by the underlying assets as repayment support and agree to repay the principal and interest within a certain period. The issuance of asset-backed notes needs to meet two basic conditions: first, the issuing enterprise has assets that can generate predictable cash flow, such as existing creditor's rights (recovered funds and accounts receivable), public transport charging rights and other income rights assets; Second, the legal ownership of assets is clear and has not been used for mortgage guarantee. Three. Equity financing mode Equity financing means that investors inject funds into enterprises and projects by acquiring the equity of financing enterprises, and then buy back, transfer or share the profits of enterprises through equity premium to obtain investment returns. This model can be divided into equity financing and industrial fund financing. 3. 1 The undertaking enterprise or company of equity financing project introduces new shareholders and funds by transferring part of enterprise ownership, project ownership and pledged shares. For the funds obtained from equity financing, the development enterprise or project company need not repay the principal and interest, but share the profits with the new shareholders, that is, investors. There are three kinds of direct listing financing, indirect listing financing (backdoor listing) and listing refinancing. Among them, listing refinancing refers to the behavior of listed companies to raise funds by issuing shares again when they undertake projects, mainly including rights issue and additional issuance. Among them, the issuance of new shares is divided into private placement and public issuance of new shares, and private placement only issues shares to specific objects not exceeding 10. Its advantage is that there are no other costs except intermediate costs such as handling fees and distribution fees, and there is no pressure to repay the principal and interest. However, financing institutions are highly qualified and must be listed companies. 3.2 Investment fund financing is staged equity financing by attracting investment funds to inject capital in the form of equity investment. Investment fund refers to the form of trust, contract or company, through issuing fund securities to raise many idle funds in society, forming a certain scale fund, which is operated by investment management institutions composed of professionals and invested in different industrial projects, and the investment income is divided according to the proportion of investment. At present, the main types of industrial investment funds are public utilities, real estate and high technology. Compared with debt financing, equity financing has the advantages of large financing scale and no pressure on enterprises to repay capital and interest. However, the threshold is high, and the capital market has strict requirements for listing financing and refinancing, requiring stable income and high yield, which is only applicable to operational infrastructure. 4. Non-traditional financing mode Non-traditional financing means that financing enterprises use trust companies or fund subsidiaries to design and sell financial products to raise funds from investors, and then trust companies or fund subsidiaries inject funds into financing enterprises through loans or equity. 4. 1 trust plan financing means that the financing unit obtains financing with the help of trust companies. Trust companies issue wealth management products to raise funds, and then inject funds into fund-raising units in the form of trust loans or equity investment, and then withdraw trust funds and income after the project generates income. According to the way of capital injection, trust financing can be divided into loan type and equity type. Loan type refers to the trust company as the trustee, accepting the entrustment of investors, collecting funds in the form of trust contracts, and then injecting funds into construction enterprises or project companies through trust loans, which pay interest regularly and repay the principal to the trust company when the trust plan expires. Equity type means that after the trust company raises funds, it injects funds into the project company in the form of equity investment (acquisition of equity or capital increase and share expansion), and at the same time, the project company or the relevant third party promises to buy back the equity held by the trust company at a premium after a certain period of time (such as two years), and the trust company will recover the funds and income. 4.2 The financing of the special asset management plan of the fund subsidiary refers to the financing obtained by the contractor or the project company with the help of the special asset management plan of the fund subsidiary. Fund subsidiaries raise funds through asset management contracts or issue special asset management plans, and then inject funds into project enterprises through equity investment. The project generates income. After the asset management plan expires, the project company repurchases the rights and interests, and the fund subsidiary recovers the funds and income of the asset management plan. Loan financing is very common in China's economic market. Relevant builders can make corresponding loans to banks through land use certificates or construction project permits. After obtaining funds, we will carry out corresponding construction and development work, and there are more and more financing methods for construction projects in China's economic market.