Forms of Financial Support for Enterprise

Topics: Debt, Finance, Bond Pages: 6 (2065 words) Published: April 20, 2013
Forms of financial support for enterprise

Entrepreneurial finance is an important issue in business. This article is devoted to the issue of financing of business. There are many forms and methods of financing the enterprise: for this purpose may be used the issue of shares, loans, leases financing, mortgages, etc. Each of the used form of financing has certain advantages and disadvantages. Therefore, in any investment project should be a thorough assessment of the effects of using different schemes and alternative forms of financing.

The concept of "financing business"
Financing is one of the types of support funds business. Financing and lending a very similar concept, but still have some differences from each other. Lending can be considered as part of the financing. Lending as funding provides the financial needs of production. Financing is gratuitous and irrevocable provision of funds in various forms for some activity. An important feature of the financing appears that the right of property in the subject, which provided the funds does not arise. Besides funding could be only cash. Another major feature of investing is to make profit, while financing not intended such purpose. It is possible to provide the following types of financing of companies: • Self-financing

• Public financing
• Bank loan
• Commercial loans
• Shares
• Leasing
• Intergovernmental funding, etc.
Let us consider all types of finance companies.
State funding.
Today, the government takes the responsibility to finance the priority state program of development of industry, agriculture, transportation, communication, and to provide funds functioning social infrastructure. All the financial measures of the government are directed not only to the direct increase in financial resources of businesses, but also have a stimulating nature and are designed to direct their development, taking into account national interests. The state supports small and medium enterprises, usually in the areas of investment, employment, innovation, export, regional distribution of production and is based on a diverse arsenal of financial leverage. Particular methods of state influence on the increased financial capacity of small and medium enterprises can be divided into three categories: direct, indirect and financing through venture capital partnership.This type of financing business activity is strictly targeted receiving consolidation in acts of public authorities. Spending is not the intended purpose should be viewed as a breach of an obligation by the recipient of funding and can serve as a basis for the application of measures of responsibility.State funding is provided in several forms. Subsidies - the kind of unpaid assistance which is provided mainly large firms. Subsidies for small businesses are regional. They are given by the local authorities and have a intended purpose. Targeted programs are the tallies on the resources and timing of implementing a complex of research, development, production, socio-economic, organizational, economic and other measures to ensure the effective solution of problems in the field of state, economic, ecological, social and cultural development .In addition to funding targeted programs and other state needs the state is taking steps to provide financial assistance and support to businesses and industries whose activities are, on the one hand, it is vital to satisfy public interest of society, and on the other - cannot be done without an influx of cash from outside . Financial assistance and support can be carried out by financial institutions of certain costs (selective redevelopment) or industries in general, the needs of the subjects by providing grants, subsidies, subventions . The procedure of state lending business activity depends on the subject, which provide cash.

Equity capital - it's personal funds invested in the business. If the business is not successful, then the investor will lose them....
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