What is financing?
Financing, also known as Financing in English, is not only the behavior and process of raising funds for a company from a chivalrous point of view. In fact, to put it bluntly, the company asks for money from others.
But others will not give you money for no reason, so if you want money, you need to give a reason why they should give you money.
Generally speaking, the financing objects mainly include: credit, mortgage, pledge and investment risk.
- Credit
Large enterprises with good credit can rely on their credit to raise funds.
For example, large enterprises can use accounts receivable to finance.
Accounts receivable financing is supposed to be paid in one hand and delivered in one hand, but the powerful company collects a part of the loan from the buyer before delivery, and the balance is paid when the goods are delivered.
- mortgage
Mortgage refers to physical assets, such as land, factory buildings, real estate, machinery and other tangible assets. The tangible assets are mortgaged to the bank, and the bank lends to the enterprise based on the assessed value of the collateral.
- pledge
Mortgage of physical assets is called pledge, and mortgage of financial assets is called pledge, such as equity and insurance policy. Enterprises obtain financing by pledging equity.
- venture capital
For innovative companies, such as Internet companies, Internet companies do not have so many physical assets, no factories, machinery, and not so much credit to lend, so what should they do?
For start-up innovative enterprises, financing is obtained through the introduction of venture capital.