Entrepreneurship. Costs. Sources of business financing. Sources of business financing Sources of business financing examples

No enterprise can exist without financial investments. It doesn’t matter whether a business project is at the beginning of implementation or has already existed for several years, its owner faces a difficult task - to constantly search and find sources of business financing.

Main types of business financing sources

Finance is the total amount of funds that ensure all the activities of the company: from solvency to suppliers and lessors in the present to the possibility of expanding the scope of interests in the future.

Unfortunately, from time to time they may reasons arise that impede the smooth and uninterrupted operation of the enterprise. Among them may be:

• funds from the sale of products arrive later than the time comes to pay off debt obligations,
• inflation depreciates the income received so that it is impossible to purchase raw materials for the production of the next batch of goods,
• expansion of the company or opening of a branch.

In all of the above situations, the company has to look for internal and external sources of financing.

Source of financing is a donor resource that provides a permanent or temporary influx of material and intangible funds. The more stable a company's business is, the higher its liquidity in the economic market, so the main headache for an entrepreneur is finding the best source of financing.

Types of funding sources:

• interior,
• external,
• mixed.

Financial analysts insist on the idea that primary sources must be rooted in several different resources because each of them has its own characteristics.

Internal sources

Internal sources of financing are the totality of all the organization’s own tangible and intangible resources that were received as a result of the company’s work. They are expressed not only in money, but also in intellectual, technical and innovative resources.

Internal sources of business financing include:

• income in cash equivalent,
• depreciation deductions,
• issued loans,
• withholding wages,
• factoring,
• sale of assets,
• reserve profit,
• redistribution of funds.

Income in money

Profit from the sale of goods or services belongs to the owners of the company. Some of them are paid as legal dividends to the founders, and some go to ensure the functioning of the company in the future (purchases of raw materials, payment of labor, utility bills and taxes). Perfectly suitable as a source.

Depreciation deductions

This is the name of a certain amount set aside in reserve in case of breakdown or wear and tear of equipment. It should be enough to buy new equipment without the risk of getting into other sources and assets. They can be used as an investment in a new idea.

Internal sources of business financing

Loans issued

Those funds that were issued to clients on a credit basis. If necessary, they can be claimed.

Salary deduction

The employee has the right to receive payment for the work done. However, if you need to invest additionally in a new project, You can refrain from paying for a month or two, having previously agreed with the staff. This method is fraught with great risk, as it increases the company's debt and provokes workers to strike.

Factoring

The ability to defer payments to the supplier company by promising to pay everything with interest later.

Sale of assets

An asset is any tangible or intangible resource that has its own price. If an enterprise or its participants have unused assets, such as land or warehouse space, then they can be sold and the proceeds invested in a new, promising project.

Reserve profit

Money that is set aside in reserve in case of unexpected expenses or to eliminate the consequences of force majeure and natural disasters.

Redistribution of funds

It will help if the organization is simultaneously engaged in several areas. It is necessary to determine the most productive and transfer finances to it from other, less effective ones.

Internal financing is preferable, since it does not imply outside interference with the subsequent partial or even complete loss of main control over the activities of the enterprise.

External sources

External sources of financing are the use of financial resources received from outside to continue the company's activities.

Depending on the type and duration, external financing can be attracted (from investors and the state) and borrowed (credit firms, individuals and legal entities).

Examples of external sources of financing:

• loans,
• leasing,
• overdraft,
• bonds,
• trade loans,
• equity financing,
• merger with another organization,
• sale of shares,
• state sponsorship.

Types of external sources of business financing

Loans

A loan is the most common way to get money for development, because you can not only get it quickly, but also choose the most appropriate program. In addition, lending is available to most business owners.

There are two main types of loans:

• commercial (provided by the supplier company in the form of deferred payment),
• financial (actually a cash loan from financial organizations).

The loan is issued against the working capital or property of the company. Its amount cannot exceed 1 billion rubles, which the company must return within 3 years.

Leasing

Leasing is considered one of the types of lending. It differs from a regular loan in that an organization can lease machinery or equipment and, carrying out its activities with their help, gradually pay the full amount to the legal owner. In other words, this is a full installment plan.

By leasing it is possible to rent:

• the whole enterprise
• plot of land
• construction,
• transport,
• technology,
• real estate.

As a rule, leasing companies accommodate and provide the most favorable conditions to the borrower: they do not require collateral, do not charge interest, and draw up an individual payment schedule.

Registration of leasing is much faster than a loan due to the absence of the need to provide a large number of documents.

Overdraft

An overdraft is a form of bank lending when the company's main account is linked to a credit account. The maximum amount is 50% of the monthly cash turnover of the company itself.

Thus, the bank becomes an invisible financial partner, which is always aware of the commercial situation: if an organization needs investments for any needs, funds from the bank are automatically transferred to its account. However, if by the end of the agreed period the money issued is not returned to the banking institution, interest will be charged.

Bonds

Bonds mean a loan with an interest rate issued by an investor.

In terms of time, there can be long-term (from 7 years), medium-term (up to 7 years) and short-term (up to 2 years) bonds.

There are two bond options:

• coupon (the loan is paid with an equal percentage breakdown for 2, 3 or 4 times during the year),
• discount (the loan is repaid several times during the year, but the interest rate may vary from time to time).

Trade loans

This method of external financing is suitable if enterprises cooperating with each other agree to receive payment in kind, goods or services, that is exchange the product of production.

Leasing as a form of external financing

Equity financing

Such a source implies involvement of a new member, investor in the founders, who, by investing his funds in the authorized capital, will expand or stabilize the financial capabilities of the company.

Merger

If necessary, you can find another company with the same financing problems and merge the companies. With economies of scale, partner organizations can find a more profitable source. How? To take out the same loan, the company must be licensed, and the larger it is, the more likely it is that the procedure for obtaining a license will be successful.

Sale of shares

By selling even a small number of company shares, you can significantly replenish your budget. There is also a chance that large capitalists who are ready to invest in production will become interested in the company. But you need to be prepared to share control: the greater the flow of investment from outside, the larger piece of the share will need to be shared.

Government sponsorship

A separate type of external financing. Unlike a bank loan, government sponsorship involves a free and irrevocable loan of money. However, it is not so easy to obtain it, because you need to meet one important criterion - it falls within the sphere of interests of government bodies.

There are several types of government funding:

• capital investments (if on a permanent basis, then the state receives a controlling stake),
• subsidies (partial sponsorship),
• orders (the state orders and buys products, providing the company with 100% sales of goods).

External financing is associated with great risks, and it is better to resort to it in cases where you cannot cope with the crisis in the company on your own.

Pros and cons of internal and external sources of financing

How to choose a funding source

The efficiency and profit of the entire organization as a whole depends on the correct choice of source of financing. First of all, a businessman should check his actions with the following list:

1. Give precise answers to the following questions: why is financing needed? how much money will you need? When will the company be able to return them?
2. Decide on a list of potential sources of collateral.
3. Starting with the cheapest and ending with the most expensive, create a hierarchy.
4. Calculate the costs and payback of the business idea for which sources are being searched.
5. Choose the most optimal financing option.

It is possible to understand to what extent the choice of a funding source was justified only by the results of the work, after a while: if the productivity and turnover of the organization increased, then everything was done correctly.

Have a good day everyone who came across this post in the middle or at the end of the working day! Today we will cover such a non-core, auxiliary topic as the main sources of business financing. You simply need to delve into this topic if your goal is to understand how the economic system of society functions. Let me remind you that the study of this section is provided for by all specifications of the discipline “Social Studies”

Sources of financing

Business is, in short, an entrepreneurial activity whose purpose is to make a profit, that is, roughly speaking, to make money. Business begins with the first transaction, when you sell something: a product or a service, or something else (who knows what will be invented in the future!).

Any business starts with starting capital. He can be anything. For example, one of my friends started a business with 10,000 rubles and a closet that he rented. He started fixing computers there. This happens if you don’t have rich relatives who can help with start-up capital.

Thus, the first source of business financing is personal savings of citizens. This is the money that you put in your socks, or in your box, or in your piggy bank.

The second source Business financing is an investment. An investor can invest in your company, firm, or you personally if he sees potential in your business. Of course, the investor also takes wild risks. But that’s why he’s an investor, to risk his money.

For example, everyone knows the history of Apple; how many films have been made about Steve Jobs! Steve himself called investors to invest in his startup in the garage. In the end, the guys from Silicon Valley were lucky and they invested money in them, and they were right.

As for Russia, there are many investors in Russia, but they are afraid to invest money, preferring foreign offshore companies and foreign companies.

The third such source serve as bank loans. You can go to a bank, and if you have a good credit history and you defend your business plan well, then they can give you a substantial amount.

Another source can be government grants. You look on the Internet for a government organization that distributes grants for entrepreneurial activities and off you go. For example, in our Perm region, the Ministry of Agricultural Development gave, and seems to be giving, grants to those who decided to take up farming.

This is where the main sources of funding end and the non-main ones begin.

Among them, for example, we can highlight loans from private individuals. For example, you know that your friend has money. You come to him and tell him to lend them to you. And he can give. Or maybe not. And if the person is not your friend, then he can hire bandits to get your debt out of you.

It is clear that this is all some kind of nonsense, but there are persistent rumors that they have returned. So nothing like this can be ruled out.

Also, non-main sources include rental property. Well, this is understandable if you already have a business and it has some kind of commercial property: company cars, or apartments, or retail space.

Something else important

There is such a task in the Unified State Examination in social studies of the second part of the test, in which you are required to draw up a plan on a similar topic. By the way, I’ll now post this plan, which I drew up with my own hands. I don’t recommend copying it directly, because if it is published here, it is no longer unique.

Plan for the second part:

Topic: Main sources of business financing

1. The concept of a source of business financing.
2. Internal sources

• Profit from leasing company assets
• Financial savings
• Profit from the sale of company shares

3. External sources

• Bank loans
• Investment funds
• Government funding: for example through a grant system

4. Business financing as a condition for the success of its operation

5. Business planning as a condition for providing business with financing

I think you get the idea on this topic! Share the article on social networks, and also join our VKontakte group.

Best regards, Andrey Puchkov

The development of technology is forcing more and more people to think about their own business, as jobs are becoming fewer every day, even specialists and professionals are being replaced by robots. The main questions when starting a business are: the idea and the means to start. How and where you can raise capital is described in this article. When choosing a financing method, it is advisable to turn to trusted sources and trusted investors.

In the modern world, people are constantly surrounded by various types of businesses. Most of them are created by the simplest people who had an idea. Its implementation could take a long time. Sometimes a worthwhile project quickly turns into a profitable business. An economist once said: “Looking for a business idea? Find something in the environment that doesn’t suit you.” This is how dry toilets appeared on the streets, cafes with take-out options, and much more.

Types of business

With the advent of new technologies and the increasing needs of people for comfort and luxury, the number of types of businesses is also growing. The list of areas and directions can be endless, but let us focus on the main ones:

• auto business;
• tourism and transport;
• wholesale and retail trade;
• repair and construction work;
• Agriculture;
• entertainment and hobbies;
• education;
• beauty and health and others.

Many of them have already partially or completely switched to the online platform. When choosing a direction, you should be guided not only by profitability, but also by personal interest. One must have a sincere interest in the business, be passionate about it, and strive to bring the enterprise to a qualitatively new level in terms of profitability and development prospects.

The cost of starting a business depends not only on the direction, but also on the form of entrepreneurship. In some situations, only a small amount is enough to register a business; you can use either your own apartment or a garage as an office, and personal mobile devices will become tools for development. This option is especially common among freelancers and people involved in Internet projects.

Cost of company registration:

• Individual entrepreneur – eight hundred rubles, plus payment for copying materials;
• LLC - four thousand rubles, in addition to this, a minimum of ten thousand of the authorized capital is required (data for 2018).

As for investments in a new enterprise, they can be very different, since they consist of prices for equipment, rent of premises, if required, the number of personnel who will need to pay wages, and other things. So, how much money you need to open your own business is not a clear-cut question, since it depends on many factors.

Drawing up a business plan for the project

This is one of the key aspects when planning future activities. Drawing up a project begins with defining goals and time frames for their implementation. Next, the resources required at the initial stage and the payback period are calculated. The last parameter is extremely important when attracting investors. People who are ready to invest their money in someone else's business, first of all, look at the period of time within which they will begin to receive dividends.

When drawing up a business plan, you should be guided by the following rules:

1. Timely study the business market, analyze existing companies and potential competitors.
2. Determine the advantages of your company that will allow you to become better than your competitors. The project plan should reflect all the strengths.
3. Clarify the strengths and weaknesses of the project, as well as ways to overcome shortcomings.
4. Write a marketing plan, describe the advertising campaign in one section, and methods for attracting regular customers in the second.
5. Determine what the main problem is, that is, what problem the new business will solve.

As part of your financial plan, it is worth identifying possible unexpected losses and options for raising additional money. Such reinsurance will allow you to avoid problems during implementation.

Today there are many business development strategies; let’s look at the most common among them, which have proven effective over a long time.

Key areas of entrepreneurship development:

• market penetration – reaching new potential consumers through territorial changes in location, as well as the release of new products;
• market development - opening new points of sale of goods and services;
• alternative channels - choosing new sales routes, for example, using an online platform;
• product development – ​​improvement of manufactured goods and improvement of the quality of services provided by attracting specialists;
• new products – the creation of new products and services allows not only to attract new customers, but also to expand the range of consumption of existing consumers.

When choosing a strategy, it is important to focus on the characteristics of the market, the age category of the bulk of potential customers, their interests and needs.

Where to get money - the main forms of sources of finance

The issue of finding money is especially acute when it comes to expensive business projects that require the purchase of equipment. To successfully complete the case, it is worth drawing up a detailed and truthful plan. Openness attracts investors. The main sources of business financing are divided into external and internal.

External

The main external sources of business financing include:

All external sources of financing are associated with the need to return funds to third parties. Investing in start-up businesses is a common form of investment.

Domestic

First of all, when looking for money, a new and existing entrepreneur turns to his own money. The main internal resources used to finance business include:

• initial capital – basic investment in development;
• income received from activities;
• money from the businessman’s employees and relatives.

The capital of the enterprise is based on the initial investments of the founders. Of course, in the twenty-first century it is possible to start a business without any money, but it is much easier when there is a certain amount accumulated on your own, which represents investment capital.

There are several options for attracting investment at the initial stage of business development. All of them are available to a beginner in the field of business, but you should not try to use them all at once. It is recommended to select several main areas and focus on them. Start-up capital for a small business can be found through different methods.

Own funds

The most common answer to the question: “Why don’t you open your own business? - No money". Indeed, most undertakings require an infusion of finance. They represent an investment in a start-up project. Below we will present options for where you can get funds from outside, but it is often difficult to do without your own money.

As a rule, if a person does not have enough finances himself, then he attracts one or more people into a partnership. At the initial stage, and subsequently, it is easier to do business as a group, and of course, finding a certain amount, for example, is easier with three people than alone.

It is recommended to immediately divide the responsibilities between the founders and the principles of making a profit. There are many varieties: for some, dividends are determined equally, for others, in accordance with investments, and for others, based on the amount of work done.

Government grants and government assistance program

Receiving grants and other forms of assistance from government agencies is a long procedure, burdened with the collection of many documents. In most cases, the authorities support initiatives in industries that are interesting for the country as a whole.

It is difficult to get a grant for an enterprise aimed at opening an amusement park or cafe. However, if the project satisfies any social needs for the implementation of which the authorities do not have free funds, then there is a chance to obtain financial support.

When contacting government agencies, you should carefully study the project, collect all the documentation, obtain permits, etc. The allocation of money will occur only if the subject shows:

• permissibility of activities, that is, availability of permits;
• social significance - how it will help society or certain categories of the population;
• profitability - the business will not fail;
• personal willingness to take responsibility for any outcome.

Features in the allocation of a grant are the need to pay tax on the money received and the gradual receipt of funds in accordance with the business plan. Government financing of small businesses is one of the priority areas in modern Russia. The difficulty is that for the last few years there has been a budget deficit.

Venture capital represents cash investments from third-party investors that are focused on new projects and startups. Investors are willing to take risks, but expect higher returns than those who finance standard areas.

Thus, venture investors, as a rule, invest money in many non-obvious projects and benefit due to the high profitability of a number of them.

When attracting this type of capital, it is worth emphasizing the high profitability of the business in the short term. If this is acceptable for the enterprise being implemented, then there is a great chance of attracting venture investors.

Private foundations and business incubators

Business incubators are a fairly new direction in the modern Russian Federation. They are organizations that supervise and support aspiring entrepreneurs at all stages of development.

In most cases, their assistance is based on the provision of premises, legal support and accounting services. The provision of financial assistance is not provided in a direct form, but the businessman has the opportunity to save on a number of areas, as well as receive the necessary consulting support.

Private funds created by businessmen and investors are also an option for attracting outside capital. The main thing is that the goals of the entrepreneur and his idea are in tune with the values ​​and principles of the organization. It is generally easier to obtain funding from a private foundation than from government agencies.

Business angel investments

A business angel is a cross between venture investors and an incubator, as it provides both financial and advisory support to a young entrepreneur at the start of project development.

In some cases, there is an option when financing is provided on the condition of dividing the business, that is, transferring part of the company to an angel. This option is often considered by single individuals, that is, people who open a company on their own, as well as those who were unable to attract capital by other methods. For example, at one time the Amazon company appeared precisely thanks to such investors; not a single banking organization believed in the idea of ​​a company whose creator is the wealthiest person today. A business can be financed in different ways, in particular, with the support of other businessmen.

Bank lending

The most common way to attract external capital is debt from a financial and credit organization. The evolution of the development of the banking sector has led to the fact that the economic potential of the area has gained great power. It is very difficult to predict whether a loan will be received, since banks take into account many aspects, and there is also a human factor.

When choosing this method, it is recommended to create an extensive list of potential lenders and be prepared to visit more than one institution. The issuance of business loans is carried out by special people who are market analysts and assess the prospects for the development of a particular area, but they are all people. In particular, the mood of a particular person determines whether the application will be approved.

The positive answer: whether it is worth lending to a client is influenced by such factors as the presence of previously issued loans and their repayment. The most interesting thing is that banks are most loyal to those people who have had or are having difficulties getting their money back. For the bank, this is an indicator that they will take the maximum percentage from the client.

Leasing is a salvation for many beginning entrepreneurs whose activities are burdened with the purchase of expensive tools. Purchasing equipment is much more difficult and expensive than leasing it.

Typically, the interest rate is not very high, although it depends on the item, and it is much easier to recoup the monthly payment than the cost of the instrument. A striking example of a modern leasing business is car sharing. A person, having rented a certain number of cars, rents them out every minute to everyone who wants them. Its expense items are the maintenance of the application and the maintenance of the machines. The rest of the difference between income and leasing interest goes to him.

Loans

Loans are divided into short-term and long-term. In the first case, we are talking about short-term borrowing of money, for example, to purchase resources. The advantage of this type of loan is low interest rates and the absence of long-term financial dependence on the lender.

Long-term loans are usually provided against property. The essence of such debt is that in case of non-payment of the loan, the lender seizes the company's property as compensation for lost money. Thus, the provision of property provides more opportunities for the entrepreneur. If the company does not have real estate, then the collateral can be any personal property, for example, an apartment or a country house. People also provide cars and other valuables as collateral.

The loan is also provided if there are guarantors. This option is not available in all banks, and in most cases it occurs when we are talking about small amounts.

Crowdfunding platforms in the Russian Federation and abroad

Crowdfunding is a specialized platform where money is raised for specific purposes. Most often they are socially oriented, for example, helping victims of a natural disaster, however, there are platforms focused on the development of certain business sectors.

In particular, young musicians often raise funds in this way to release an album or record a video. If a person feels that his undertaking will be of interest to large masses, then he can turn to this method of raising funds.

Moreover, the creation of a platform does not have to be aimed only at Russian investors. Often people from other countries actively support ideas that are close to their spirit. Billions of dollars are raised each year through small donations. The main principle is voluntary participation, and the contribution can be even minimal. This method should not be classified as the main one, but it can allow you to raise additional funds.

What sources of financing are beneficial for small or medium-sized businesses?

There is no clear answer as to which SME financing is best to choose. It all depends on the direction of the enterprise, riskiness and the chosen strategy.

The advantages of internal sources of business financing are that there is no need to attract third-party money, but in practice this option is not always possible. The need to find additional funds, as a rule, is associated precisely with the lack of internal capital of the company.

When choosing a specific external source, it is advisable to choose loans with a low interest rate and a long term if you are not sure of receiving income soon. It often takes several years to break even. With online business, this situation changes; profits can be made almost immediately.

In practice, there are different sources of financing for small businesses; when choosing, you should be guided by the business plan drawn up. If an entrepreneur has the opportunity to start a business exclusively with his own money, then this is an advisable action, since otherwise he will need to return the funds without a guarantee of success. A business can be financed in different ways; as a rule, an entrepreneur uses several methods. The more money is required to start or develop, the more options an entrepreneur resorts to.

In contact with

In the process of analyzing decisions related to capital structure, company managers operate with such concepts as internal and external sources of financing of the enterprise.

These categories of incoming funds are relevant for almost every organization. Depending on the scope of its activities, external financing and internal financing are used in different proportions. Sometimes it is enough to attract fairly small amounts from investors and creditors, in other cases the lion's share of the company's capital represents This article will describe the main external and internal sources of business financing. In addition, their characteristics and examples will be given, their advantages and disadvantages will be highlighted.

What is external financing and internal financing?

Internal financing is the independent provision of all expenses for the development of a company (using its own income). Sources of such income may be:

• Net profit obtained as a result of financial and economic activities.
• Depreciation accumulations.
• Accounts payable.
• Funds set aside to pay for upcoming expenses.
• Income received on account of a future period.

An example of internal financing is investing the profit received in the purchase of additional equipment, construction of a new building, workshop or other building.

External financing involves the use of funds received from outside the company.

They can be provided by founders, citizens, the state, financial and credit organizations or non-financial companies. The key to the successful operation of an enterprise, its development and competitiveness is to correctly and effectively combine internal and external sources of financing. The ratio of your own depends on the company’s field of activity, its size and strategic plans.

Types of financing

In addition to being divided into two main groups, internal and external sources of financing are classified in more detail.

Internal:

• Due to net profit.
• Sale of free assets.
• Income from rental property.

• Investment funds.
• Loans (loans, leasing, bills).

In practice, a mixed system is most often used: both external and internal business financing.

What is internal financing?

Today, companies themselves are involved in the distribution of profits, the amount of which directly depends on how profitable business operations are and the effectiveness of the dividend policy.

Based on the fact that managers are interested in the most rational use of the funds at their disposal, they make sure that the most important factors are taken into account:

• Plans have been implemented for the further development of the company.
• The interests of owners, employees, and investors were respected.

With successful distribution of finances and expansion of the company’s economic activities, the need for additional financing is reduced. This reveals the relationship that characterizes internal and external sources of financing.

The goal of most company owners is the desire to reduce costs and increase profits, regardless of what type of funds will be used.

Positive and negative aspects of using your own financial resources

External financing and internal financing, as well as their effectiveness, are characterized by how convenient and profitable it is for managers to use these types of funds.

The undeniable advantages of internal financing, of course, is the absence of the need to pay the costs of raising capital from outside. Also of great importance is the ability of owners to maintain control over the company's activities.

Among the disadvantages inherent in domestic financing, the most significant is the impossibility of its practical application. An example is the insolvency They have almost completely lost their importance due to a total reduction in depreciation rates at most domestic enterprises (in the industrial sector). Their amounts cannot be used to purchase new fixed assets. Even the introduction of an accelerated depreciation procedure cannot save the situation, since it cannot be applied to the equipment that currently exists.

What is hidden under the term “external sources of financing”?

If there is a lack of own funds, enterprise managers are forced to resort to borrowing or investment finance.

Along with the obvious advantages of this approach (the ability to increase the volume of business activities or develop new areas of the market), there is a need to repay borrowed funds and pay dividends to investors.

The search for foreign investors often becomes a “lifeline” for many enterprises. However, as the share of such investments increases, the ability of enterprise owners to control is significantly reduced.

Credit and its specifics

Loans as an instrument of external financing become the most accessible way out for company owners if internal sources turn out to be insolvent. External financing of the company's budget should be sufficient to increase production volumes, as well as to return the funds raised with accrued interest and dividends.

A loan is a sum of money that a lender provides to a borrower with the condition of returning the money given and an agreed interest rate for the right to use this service.

Features of using credit funds to finance a company

Advantages of loans:

Disadvantages of borrowing:

• Often, a loan is issued to a company for a short period (up to three years). If the firm's strategy is to generate long-term profits, the leverage pressure becomes too great.
• To obtain funds on credit, the company must provide collateral equivalent to the desired amount.
• Sometimes a condition for lending is the bank's requirement to open an account, which is not always beneficial for the company.

Both external and internal sources of business financing should be used as rationally and appropriately as possible, because the level of profitability of the enterprise and its attractiveness for investors depend on this.

Leasing: definition, conditions and characteristics

Leasing is a complex of various forms of entrepreneurial techniques that are beneficial for the lessor and the lessee, as they allow the former to expand the boundaries of its activities, and the latter to renew

The terms of the leasing agreement are more liberal compared to lending, since they allow the business owner to count on deferred payments and implement a large-scale project without large financial investments.

Leasing does not affect the balance of own and borrowed funds, that is, it does not violate the ratio characterizing the external/internal financing of the enterprise. For this reason, it does not become an obstacle to obtaining a loan.

It is interesting that when purchasing equipment under the terms of a leasing agreement, the company has the right not to put it on its balance sheet during the entire period of validity of the document. Thus, the manager has the opportunity to save on taxes because assets do not increase.

Conclusion

External financing and internal financing of enterprises involves the use of their own income or raising borrowed funds from creditors, partners and investors.

For the successful operation of the company, it is of great importance to maintain the optimal ratio of these types of financing, as well as the rational and justified expenditure of any resources.

Business financing- this is supply money (financial resources) or the allocation of money (financial resources) for something.

In cases where financing is aimed at making a profit from this supply (allocation), it turns into investment(or investment financing). Investment financing, as a rule, is aimed at supporting the company’s image, rating, and profitability. At its core, the investment type of financing is designed to attract another type - trade finance, that is, direct support of the company's capital.

In a broader understanding of this concept, the following can be distinguished: types of financing:

• paid (compensated) - credits, loans, leases, loans;
• free (gratuitous) - gift, donation, subsidy, grant, subsidy, etc.

Types of funding sources.

All sources of financing in business can be divided into external and internal.

Internal source refers to the company's personal property. Firstly, this profit, that is, the difference between the company’s income and the cost of goods or expenses. Distinguish gross profit(i.e. total profit, excluding taxes) and residual income(i.e. the net profit remaining after deducting all expenses). Secondly, it is a reasonable distribution of reserves. Goods purchased or sold on time allow you to make additional profits.

There are many external sources of funding:

• other companies (the partnership element is one of the main ones in business);
• shares (selling shares allows you to attract financial resources outside the company);
• banks (loans are the most popular sources of financing);
• commodity loans (or trade loans - a type of loan that is given not by a bank, but by another company in the form of goods);
• state ( budget financing or government order).