Top 10 Tips for Successful Corporate Financing

For every company, capital is the foundation for running and developing the company. When enterprises carry out capital operations, they must not only pay attention to tangible assets, but also properly value and capitalize the intangible assets of the enterprise. What are some tips that can help enterprises with financing?

1. Franchise Financing Strategy

The significance of modern franchising has transcended this special investment method itself and has a significant impact on people's economic and cultural life. Franchise actually adds a contractual tie to the common capital tie. The franchisor and the franchisee maintain their independence and profit from the franchise cooperation. The franchisor can obtain a larger market with less investment, and the franchisee can participate in sharing the investments of others at a low cost, especially the benefits brought by intangible assets.

2. Turnkey project strategy

Turnkey project means that multinational companies build factories or other engineering projects for the host country. After the design and construction are completed and preliminary operation is completed, the factory will be Or the key to the ownership and management rights of the project shall be completely handed over to the other party in accordance with the contract, and the other party shall start operation.

Turnkey projects are a non-equity investment method developed after multinational companies from developed countries were blocked from investing in developing countries. In addition, when they have cutting-edge technology required by a certain market and hope to quickly cover a large area of ??the market, but the available capital and other factors are insufficient, they will also consider using a turnkey project approach.

3. Buy-back contract strategy

International buy-back contract management is essentially technology licensing, foreign investment, entrusted processing, and compensation trade, which is still quite popular at present. The complex is also known as "compensated investment amount" or "peer-to-peer investment".

Generally speaking, this method of economic cooperation is that multinational companies in developed countries export complete plant equipment or patented manufacturing technologies to enterprises in developing countries. The multinational companies receive the products produced by the enterprises after they are put into production. Appropriate proportion of product as payment method. Investors can also obtain a variety of benefits from production, such as the provision of machinery, equipment, parts and other products.

4. Employee Stock Ownership Strategy

At present, my country's joint-stock companies issue new shares. In order to reflect the employees' past operating results, they can issue employee shares to employees. The number of employee shares of the company cannot exceed 10% of the quota for issuance of public shares (A shares), and the number of employee shares per person must not exceed 5,000 shares; this part of the company's employee shares can be listed and circulated six months after the expiration of the new shares from the date of listing. When a company submits application materials for a public issuance of stocks, it must submit the number of employees approved by the local labor department and a list of employees' reservations to subscribe for shares. The China Securities Regulatory Commission will conduct verification. In the future, the company may no longer arrange for the company to issue shares publicly. Employee shares. Combining the success of foreign ESOP employee stock ownership plans, we propose several more realistic and feasible employee stock ownership plans: employee stock ownership meetings. According to the "Company Law", listed companies can establish an internal employee stock ownership committee as a legal social group in accordance with the "Civil Law" and other regulations, and use the employee stock ownership committee as a legal person shareholder of the company. In this employee stock ownership meeting, internal employee shareholding must reach a certain ratio, such as 20 or more. This kind of employee stock ownership can increase the value of employee assets after the company is restructured and the shares issued are listed.

Employee Fund Plan. The company's employees contribute cash to form a fund and entrust the fund assets to a professional investment company for operation. The operation of the fund can be carried out independently or in conjunction with the repurchase plan and the employee stock ownership plan.

5. BOT financing strategy

BOT (Build, Operate and Transfer) is a relatively new contractual direct investment method.

The handover in BOT is the key that distinguishes the BOT investment method from other investment methods. A contractual or contract-plus-equity joint venture means that most of the investors recover their investment through depreciation of fixed assets and dividends before the expiration of the operation period. The contract stipulates that upon expiration of the joint venture period, all the property of the enterprise will be unconditionally owned by the host country without any additional liquidation. In the BOT mode of equity joint venture operation, after the expiration of the operation period, the original enterprise is conditionally transferred to the host country. The conditions shall be agreed upon by the participating parties in the preliminary negotiations of the joint venture. This conditional transfer is also used for the handover of a sole proprietorship.

6. Project Financing Strategy

Project financing is an international medium- and long-term loan issued for a specific project. The main guarantee of the project loan is the expected economic performance of the project. The obligations of the proceeds and other participants for the risks of project construction, inoperability, insufficient income, and debt repayment are not the financial resources and reputation of the sponsor.

There are two main types of project financing: one is non-recourse project financing, which carries a high risk for the lender and is generally rarely used; the other is currently commonly used internationally with recourse projects Financing means that in addition to relying on project income as a source of debt repayment and setting security interests on the assets of the project unit, the lender also requires third-party parties with an interest in the completion of the project to provide various guarantees. Each guarantor's liability for project debts is limited to the amount of guarantee provided by each guarantor or the obligations assumed under the relevant agreement.

7. Financial leasing strategy

Financial leasing means that the lessor enters into a supply contract with a third party (supplier) based on the lessee’s request and specifications. , the lessor acquires factories, capital goods or other equipment (hereinafter referred to as equipment) in accordance with the terms agreed by the lessee within the scope of its interests, and the lessor enters into a lease contract with the lessee, subject to the payment of rent by the lessee. The conditions grant the lessee the right to use the equipment.

Financial leasing combines finance and property. It is a financing method in the form of finance and property. It has a strong financial business aspect and is therefore regarded as an equipment-related loan business.

8. Strategies for establishing financial companies

According to my country’s current financial policies and regulations, powerful enterprises can establish financial companies. As a type of non-bank financial institution, enterprise group financial companies Commercial banks and related securities investment funds and industrial investment funds can be initiated and established. To apply to establish a financial company, the applicant must be an enterprise group that meets a series of specific conditions.

A financial company can operate: absorb local and foreign currency deposits from member units, issue financial corporate bonds upon approval, issue local and foreign currency loans to member units, provide buyer's credit to buyers of member unit products, etc., China The People's Bank of China decides and approves the business based on the specific conditions of the financial company.

9. Industrial Investment Fund Strategy

Investment funds are an important financing method in today’s market economy. They were first produced in the United Kingdom and developed in the United States. Currently, the total value of the global fund market reaches US$3 trillion, which is equivalent to the total global merchandise trade. Since the 1990s, the use of overseas investment funds has become a new and effective means for my country to utilize foreign capital.

There are two main circulation methods of investment funds. One is redeemed by the fund itself at any time (closed-end funds); the other is transferred through bidding in the secondary market (open-end funds).

10. Industry asset restructuring strategy

Asset restructuring is achieved through acquisitions, mergers, capital injections, joint ventures, transfer of creditor's rights, joint operations and other methods for the same industry and related industries. The advantageous enterprises have rapidly expanded their business scale at low cost and rapidly expanded their production capacity and marketing network.

What are the legal financing methods between enterprises?

1. Entrusted loans

Entrusted loans refer to loans provided by the client (including government departments, enterprises and institutions, Other economic organizations and individuals, etc.) provide funds and determine the loan object, purpose, amount, term, interest rate, etc., and the financial institution will issue, supervise the use and assist in the recovery. The financial institution only charges a handling fee, and the risk is fully borne by the client. loan.

To put it figuratively, a bank is added between Company A and Company B, forming a loan process of Company A? Bank? Company B. This is legal.

2. Transfer of creditor's rights

Transfer of creditor's rights refers to the act of a contract creditor transferring all or part of its creditor's rights to a third party through an agreement.

For example, Company A now has a debt of 2 million yuan against Company B, but Company B cannot pay the money until 3 months later. However, because Company A is eager to expand production and urgently needs the 2 million yuan, it can use the method of creditor's rights transfer, and Company C will transfer the creditor's rights of Company A for a transfer consideration of 2 million yuan and interest. This is no different from Company C directly lending 1 million yuan to Company A, but because it is a transfer of creditor's rights, it is legal.

3. Trust loan

Trust means that the trustor entrusts his property rights to the trustee based on his trust in the trustee, and the trustee entrusts his property rights to the trustee in his own name according to the wishes of the trustor. , the act of managing or disposing of a property for the benefit of the beneficiary or for a specific purpose.

According to the provisions of the "Trust Law" and "Administrative Measures for Trust Investment Companies", an enterprise can serve as the principal to achieve the purpose of lending to another enterprise in the form of a trust loan. The loan target of a trust loan is determined by the trustee, and the trustee cares about the income, not who to lend to.

4. Natural person stand-in model

Since loans between enterprises and citizens are private loans, they are protected by law. Therefore, the lender can first lend the funds to an individual (usually the major shareholder of the borrower or a trustworthy third party), and then the individual lends the funds to the company that actually uses the funds, and the company lends the funds to the individual. The other party's enterprise provides joint and several guarantees, or provides mortgages, pledges and other guarantees. If an individual cannot repay the loan, the lender will pursue the individual borrower and require the guarantee company to assume the guarantee liability.

However, according to the provisions of the "Company Law", if a company provides guarantees for its shareholders or actual controllers, it must be resolved by a shareholders' meeting or general meeting. This is a procedural requirement.

5. Loan model guaranteed by pledge of certificate of deposit

The loan model guaranteed by pledge of certificate of deposit is a model that is combined with bank loans. The party intending to lend the funds does not actually lend itself, but deposits itself in the bank to obtain a deposit certificate, and uses the deposit certificate as a pledge guarantee for the borrowing company to apply for a loan from the bank.

Using deposits as veneers is very safe, and the banking industry can obtain interest, and companies can actually obtain loan funds from banks. If the borrower cannot repay the loan on time, the bank will directly deduct the repayment from the pledged deposit certificate account. The guarantor can then pursue repayment from the borrower. Under this model, the guarantor of the deposit certificate pledge cannot charge interest based on the lending relationship, but can charge a certain guarantee fee. ;