Public debt financing refers to the public issuance of bonds in the securities market, including corporate bonds, short-term financing bonds and corporate bonds to be issued in the future. The advantages and disadvantages of issuing bonds are between listing and bank borrowing, and it is also a practical financing means, but the key is to choose the right time to issue bonds. When choosing the timing of issuing bonds, we should fully consider the trend expectation of future interest rates. There are many kinds of bonds, among which corporate bonds, corporate bonds and convertible bonds are common in China. The requirements for corporate bonds are relatively low, while the requirements for corporate bonds are relatively strict. Only wholly state-owned companies, listed companies and limited liability companies established by two state-owned investors are eligible for issuance, and there are strict restrictions on the asset-liability ratio and capital of enterprises. Convertible bonds can only be issued by key state-owned enterprises and listed companies.
Financing by issuing bonds has the advantages of long repayment period, few additional restrictions and low capital cost, but the procedures are complicated and strict with enterprises. Moreover, China's bond market is relatively light, trading is inactive, and the issuance risk is high, especially long-term bonds, which face greater interest rate risk and lack financial tools for risk management. At present, it is difficult for private enterprises to obtain debt financing through public channels, and non-public debt financing should be mainly considered.
Non-public debt financing includes bank loans, government loans, trust loans and corporate and personal loans.
Bank loan means that the bank, as the main business entity, operates according to the credit rules, requiring asset security and capital return, and the risk depends on asset quality. Due to the long responsibility chain and recourse period and asymmetric information, credit financing is dominated by the judgment of a few decision makers on the project, which pushes the risk accumulation to the road of indirect financing for enterprises in the future. Credit financing needs the support of a developed social credit system. Bank loan is the most commonly used financing channel for enterprises, but the basic practice of banks is to "love the poor and the rich" and take risk control as the principle, which is determined by the business nature of banks. As far as banks are concerned, they are generally unwilling to take too much risks, because banks have no right to claim profits when borrowing, so they are unwilling to borrow from risky enterprises or projects, even if they have high expected profits. On the contrary, enterprises with strong strength and stable income or cash flow are welcomed by banks.
Compared with other financing methods, bank loans mainly have the following shortcomings: first, the conditions are harsh, there are too many restrictive clauses, the procedures are too complicated, time-consuming and laborious, and sometimes they may not run all year; Second, the loan period is relatively short, and long-term investment can rarely be loaned; Third, the loan amount is relatively small, and it is difficult to solve all the funds needed for enterprise development through banks.
Especially in the start-up period and entrepreneurial period, the loan risk is high, and it is difficult to obtain bank loans for investment and entrepreneurship. Trust loans refer to loans granted by trust institutions to self-approved units and projects with their own funds such as trust deposits within the scope prescribed by the state. Trust loans can be divided into two categories according to whether the client puts forward specific requirements: class A trust loans and class B trust loans; According to the purpose of the loan, it can be divided into fixed assets trust loan, working capital trust loan and temporary working capital trust loan. The interest rate of trust loans is generally higher than that of bank loans, but an important advantage of trust loans over bank loans is that both parties sign loan agreements with simple procedures and flexible mechanisms. Trust loans are suitable for those enterprises with good operating conditions and assets, which need more flexible loans.
Legal basis:
civil law
Article 440th The following rights that the debtor or a third party has the right to dispose of may be pledged:
(1) Bills of exchange, promissory notes and checks.
(2) Bonds and certificates of deposit.
(3) Warehouse receipts and bills of lading;
(4) Transferable fund shares and equity;
(5) Transferable intellectual property rights such as the exclusive right to use a registered trademark, patent right and copyright;
(6) Existing and future accounts receivable;
(7) Other property rights that can be pledged according to laws and administrative regulations. Article 667 A loan contract is a contract in which the borrower borrows money from the lender, repays the loan at maturity and pays interest.
Article 735 A financial lease contract is a contract in which the lessor purchases the lease item from the seller according to the lessee's choice of the seller and the lease item, provides it to the lessee for use, and the lessee pays the rent.