The CPA examination channel shares the main ways of illegal financing activities for everyone. Please refer to it and hope it will help.

Based on the fact that it is difficult for private small and medium-sized enterprises to meet the capital demand through normal channels, informal financial activities have been very active in some developed areas of private economy and have become an important channel for private enterprises to solve the problem of starting and operating funds. Although the regulatory authorities have repeatedly strictly restricted various forms of private financing activities and severely banned private "disorderly fund-raising" activities, the objective existence of private financial activities is still an indisputable fact. To sum up, private financing activities mainly take the following ways:

1. Private lending

Although the financial supervision department strictly controls it, the private lending market is not active, but has become the main way of informal financing activities. Because private lending basically guarantees an interest rate higher than the bank loan interest rate 1 times, many urban and rural residents put their funds into this market, thus ensuring the source of funds for private financial activities.

2. Arrears of payment for goods

Large enterprises owe money to small enterprises, downstream enterprises owe money to upstream enterprises, and enterprises owe money to each other. Some enterprises even rely on arrears to turn over funds.

3. Private equity

That is, when the enterprise is established, part of the funds are raised by privately raising shares among employees. The fourth is to obtain funds through pawnshop mortgage. Fifth, mutual insurance and debt-to-equity swap. That is, the guaranteed party mortgages the equity of the enterprise to the guarantor as counter-collateral. Once the guaranteed party is unable to repay the debt and needs compensation from the guarantee enterprise, the creditor's rights of the guarantor to the guaranteed enterprise will be converted into equity. With the development of private financing activities, a considerable number of underground (or semi-underground) banks and intermediaries have emerged, becoming the backbone of private financial markets.

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