Equity financing of securities companies mainly refers to the public offering and listing of shares of capital securities companies when securities companies are established or increase their capital and shares, as well as the use of equity financing by securities companies in the course of operation. Equity financing has the characteristics of permanence, no repayment due date, no pressure on repayment of principal and interest, and low financing risk. It has become an important way for securities companies to raise long-term funds and an essential financing ability for their long-term development. In addition, this financing method can also promote enterprises to change their operating mechanism and truly become the main body of market competition with independent operation, self-financing, self-development and self-restraint. However, equity financing also has its shortcomings. First, the cost of capital is high. This financing method not only pays higher remuneration to investors, but also bears much higher issuance costs than bonds and long-term loans. Secondly, equity financing transfers part of the control rights of the company to new shareholders, thus dispersing the control rights of the company. In addition, equity financing increases the company's responsibility to public shareholders. The company's business activities must abide by the law and shall not harm the interests of shareholders.

2. Debt financing

Bond issuance financing is a financing method in which a securities company, as a debtor, promises to repay the principal and interest and issue securities in a certain period of time in the future. The debt financing methods of securities companies mainly include issuing bonds and bank loans. The purpose of issuing bonds by securities companies is to raise medium and long-term funds, and the interest rate of bonds issued is generally higher than that of bank savings deposits in the same period. Compared with equity financing, bond financing has the characteristics of repayment, maturity, fixed interest, security and liquidity. In addition, the capital cost of bond financing is lower than that of equity financing, which can guarantee the control of the company and play the role of financial leverage. However, the amount of bond financing is limited, and the financial risk is high, so the restrictions on issuing bonds are much stricter than long-term borrowing. Bank loan financing means that securities companies borrow money from banks to raise needed funds. The ways for securities companies to borrow money from banks include:

(1) Short-term credit loan

At present, the revolving credit line is mainly provided by banks, that is, brokers reach agreements with commercial banks or other financial institutions. If the broker needs funds within a certain period of time, it has the right to withdraw from the credit line without applying to the creditor again. This credit line is only used as emergency funds when the turnover of securities firms is difficult. This financing method is widely used by European and American brokers.

(2) Mortgage loan

This kind of loan refers to a loan issued by a bank with the property of a securities company or a third party as collateral. At present, the properties used by securities companies to mortgage loans to banks mainly include all kinds of securities representing property ownership and creditor's rights, usually including self-operated government bonds, self-operated stocks, commercial papers and self-owned fixed assets. The advantages of bank loan financing are convenience and flexibility, various terms and types, and lower cost than stock financing and bond financing. However, it may be more difficult to apply for bank loans at first, and the procedures are more complicated. The amount of bank loans is limited, generally not as large as that of stocks and bonds.

3. Bill financing

Bill financing is the oldest financing method in the money market. Commercial paper is a short-term promissory note with a specific term, which is only sold to institutional investors and can be used in the market. The duration can be several months or less, with an average of 25-45 days. Commercial paper is usually sold at a discount at face value, and part of the discount is the interest paid to investors in advance after maturity. The issued bills can be freely transferred and discounted, and it is a highly liquid credit tool. In western developed countries, bill financing is mostly used by large production enterprises in the early stage. At present, bill financing has become an important way for financial companies, including brokers, to finance short-term funds.

4. Inter-bank lending and financing

Interbank lending is generally provided by commercial banks to brokers. Brokers borrow money from commercial banks with their short-term government bonds or commercial paper as collateral. The loan period is agreed by both parties, and its purpose is to adjust the position and deal with temporary funds. Interbank lending is generally short (usually 1 day, 2 days or a week, and the shortest is several hours or overnight).

5. Securities repurchase financing

The specific way of securities repurchase financing is that creditors buy securities from brokers, and it is agreed that brokers will repurchase securities at an agreed price within a certain period of time, and the bid-ask difference is the interest payable by brokers. Its essence is short-term financing between financial institutions with securities as collateral.

6. Financing by securities finance companies

Securities finance companies are established to provide financing for securities credit transactions, and provide funds and loans for securities issuance, circulation and credit transaction settlement of securities companies and general investors. Securities finance companies obtain funds from banks and non-bank financial institutions, and then lend them to securities companies and investors in the form of mortgage financing. Japanese, Korean and China Taiwan Province securities companies all adopt this financing method. Securities finance companies have solved the financing problem between securities companies and the securities market, and played an irreplaceable role in ensuring the liquidity of the securities market, activating the securities market and cracking down on underground credit behavior, which is convenient for preventing and controlling financial risks in the early stage of the development of the securities market.