Financing

The financing is the operation which consists in obtaining monetary resources necessary to the realization of a project (“to raise funds”).

Types of financed projects

They can be in particular:

  • for the private individuals: purchase or real construction and other private needs for investment or consumption,
  • for the companies and professionals: creation or purchase of company, Investment productive or commercial, needs for exploitation (financing of the working capital)
  • for the other communities and institutions: operating expenses and of investment of community, social welfare, or an association or deprived foundation with nonlucrative goal (cultural, humane…)

Funding sources

The independent sources of financing are

  • the saving and the incomes and more been worth placement (for the private individuals)
  • equities (funds brought by the investors) and the Autofinancement (for the company)
  • the Crédit (loan funds),
  • the Tax and social security deduction (taxes and National insurance contributions, etc)
  • incidentally the gift, the heritage, etc

For the companies, the traditional financings by self-financing, equities or loans became more and more complex with the appearance of hybrid products like the convertible bonds, the complex structuring of the debt in debt senior, Dette mezzanine, etc and the appearance of the Titrisation.

Intermediaries and trades of the financing

The principal intermediaries for these operations, which centralize supply and demand of funds, are the Banque S and the purse S like, for what exclusively does not arise from the markets, the State S, the local government agencies, in particular through the management of the tax S and the social welfare by the collection of national insurance contributions and the redistribution of the richnesses.

Certain financings can be related to political incentives or takeovers, in complement or conflict with own economic strategies of the company or organization concerned.

Private sector

On the level of the Banking system, it is good to distinguish the institutions more specialized in the financings top of assessment (banks of investment in particular) and those of bottom of assessment (trade banks and other institutions of credit).

On the level of the Financial market, the distinction is to be made, on the level of the funds of investment, on those specialized in the non quoted Capital and those managing a wallet stock exchange titles.

To the level of the Financing in Ready real estate, certain companies said Courtage in Real estate credit, whose representatives are more generally called of the Courtiers, allow the private individuals to reach the property of goods, via agreements privileged with the Banking system.

National and international public sector

According to the rules of the markets, through establishments nationalized, or controlled by an local government agency, which do not belong in their statutes to the market economy. However in the totalitarian modes, the State entirely controls the financing of the economy. The financings of rescue (the IMF) or of development (the World Bank), brought to the countries of the Third world by international agencies or the developed countries are sometimes accompanied by a whole of constraints which one describes as Structural adjustment which are the subject of certain controversies.

Additional and derived activities

The financings involve various additional activities, for example those related on the payments (transfer of the sums) or to the covering of the financial risks, or, for the nonrecoverable placements entirely, with the “management of the Dette” (country of Tiers-monde for example).

See too