What Are the Different Methods of Tax Equity Financing?

Financing decision-making refers to the large amount of funds required for corporate mergers and acquisitions to determine the best financing plan. Financing decisions are a problem that every enterprise will face, and it is also one of the key issues for the survival and development of enterprises.

Financing decision

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Financing decision-making refers to

In today's world economy, financial innovation is quite active, and the available channels for financing have greatly increased.

The financing of enterprises faces the influence of various internal and external uncertain factors. To formulate a reasonable fund-raising policy, only by fully studying and analyzing these factors and grasping various fund-raising methods can accurate fund-raising decisions be made.

Different researchers have different divisions of influencing factors for financing decisions, different criteria for classification, and there are couplings between some factors, which is not conducive to the making of financing decisions. According to the thought of system analysis, this paper uses the method of system analysis to comprehensively consider the factors that affect the financing decision. The influencing factors of financing decisions are divided into two categories: indirect factors; direct factors. Among them, indirect factors work through direct factors.

1. Indirect factors affecting financing decisions. "Indirect factors" refer to factors that are relatively stable and do not change with specific financing programs, and therefore have an indirect effect on financing decisions, including: internal factors; external factors.

(1) Internal factors affecting financing decisions. That is, factors related to the state of the enterprise itself. the organizational form of the enterprise; the scale, performance, and reputation of the enterprise; the life cycle stage of the enterprise; the asset structure of the enterprise; the profitability and solvency of the enterprise;

(2) External factors affecting financing decisions. Economic environment; Legal environment; Financial environment: Finance

Policies, interest rates. Each factor includes many sub-factors.

2. Direct factors affecting financing decisions. "Direct factors" refer to influencing factors that vary with the specific financing plan, and mainly include: financing costs, financing benefits, and financing risks.

When multinational companies make financing, they should pay attention to the following issues:

The so-called financing opportunities

In practice, some small and medium-sized enterprises have no clear plan in the financing process. They are very blind, and they make mischief by chance. They do not discriminate and fully contact the investors. Many investment agents or investors who have resorted to fraudulently. Companies have the opportunity. The consequences are serious, causing the company to suffer significant losses, affecting the normal development of the company; the lighter also causes the company to waste a lot of manpower and financial resources. In addition, some small and medium-sized enterprises lack sufficient psychological preparation for the difficulty of financing. Once several financing operations are frustrated, they abandon the financing plan, miss some successful investment opportunities, and delay the pace of enterprise development. Therefore, companies should develop a guideline before formal financing

1.For any way

The first is the IMF, which is a dark loan of fake stocks. The so-called fake stock dark loan, as the name implies, is that the investor invests in the project by way of equity but does not actually participate in the management of the project. At a certain time, the shares are withdrawn from the project. This method is mostly used by foreign funds. The disadvantage is that the operation cycle is longer, and the company's shareholder structure and even the nature of the company must be changed. There are many foreign funds, so if you invest in this way, the nature of domestic companies will be changed to Sino-foreign joint ventures.

The second method of financing is bank acceptance. The investor will hit a certain amount, such as 100 million, to the project company's company account, and then immediately ask the bank to issue a 100 million bank acceptance. The investor took the bank acceptance. This method of financing is of great benefit to the investor, because he actually uses 100 million yuan several times. He can take the 100 million yuan bank and accept it at another bank for another 100 million yuan. At least 80% can be discounted. But the question is whether a bank with 100 million yuan in the company's account can issue 100 million yuan in acceptances. It is likely that only 80% to 90% of the banks will accept it. Is to open 100% bank acceptance, then the amount of funds on the company account allows you to use is still a question. It depends on the level of the company and its relationship with the bank. In addition, the biggest drawback of acceptance is that according to national regulations, bank acceptance can only be opened for up to 12 months. Now most places can only be opened for 6 months. That means you have to renew your visa every 6 months or 1 year. It takes a lot of time to spend money.

The third method of financing is direct deposit. This is the most difficult method of financing. Because making direct deposits is in violation of the rules of the bank, the relationship between the company and the bank must be particularly good. Open an account from the investor to the designated bank of the project party and deposit the specified amount into your account. Then sign an agreement with the bank. Promise that the money will not be misappropriated within the prescribed time. The bank will give the project party a loan equal to or less than the same amount based on this amount. Note: The promise here is not a pledge of the bank. He did not agree to take the money for pledge. What is agreed to be pledged is another financing method called a large pledged deposit. Of course, that financing method also has its violations of bank regulations. It is necessary for the bank to sign a commitment to guarantee that the payment will be closed 30 days before the expiry date. In fact, after getting this thing, he can take it to a bank in another place for refinancing.

The fourth method of financing (the fourth is a large pledged deposit) is a bank letter of credit. The state has a policy that a bank letter of credit issued by a global commercial bank, such as Citi, which agrees to finance the business is deemed to have an equivalent amount of deposit in the corporate account. Many companies used this bank letter of credit to make money in the past. Therefore, the national policy has undergone a slight change, and it is now difficult for domestic enterprises to use this method for financing. Only foreign-funded enterprises and Sino-foreign joint ventures are allowed. Therefore, if domestic enterprises want to use this method for financing, they must first change the nature of the enterprise.

The fifth method of financing is entrusted loans. The so-called entrusted loan is that the investor sets up a special fund account for the project party in the bank, then deposits the money into the special fund account, and entrusts the bank to lend the project party. This is a better form of financing. Usually the review of the project is not very strict, requiring the bank to make a commitment to the project party responsible for collecting interest and repaying the principal each year. Of course, those who do not repay the principal need only promise to collect interest every year.

The sixth financing method is through money transfer. The so-called direct payment is direct investment. This rigorous review of projects often requires mortgages or bank guarantees on fixed assets. Interest is also relatively high. Most are short-term. The lowest personal contact is an annual interest rate of 18. Generally above 20.

The seventh financing method is hedge funds. Now there is a type of entrusted loan on the market that does not repay principal and interest, which is a typical hedge fund.

The eighth financing method is loan guarantee. Many investment guarantee companies on the market now only need to pay more than bank interest to get much needed funds.