1. Financing refers to the monetary transaction means to pay the purchase price in excess of cash, or the monetary means to raise funds for the acquisition of assets. Financing usually refers to the activities of direct or indirect financing between the holders and demanders of monetary funds. Financing in a broad sense refers to an economic behavior in which funds flow between holders to make up for the shortage, and it is a two-way interactive process of funds, including the integration and withdrawal of funds.
2. Financing method refers to the specific form of enterprise financing funds. The more financing methods, the more financing opportunities for enterprises to choose. If an enterprise can not only obtain commercial credit and bank credit, but also raise funds directly by issuing stocks and bonds at the same time, and also raise funds by discounting, leasing and compensation trade, it means that enterprises have more opportunities to raise funds needed for production and operation. That is, the channel of enterprise financing. It can be divided into two categories: debt financing and equity financing. The former includes bank loans, bond issuance, notes payable and accounts payable, while the latter mainly refers to stock financing. Debt financing constitutes a liability, and the enterprise must repay the agreed principal and interest on time. Creditors generally do not participate in the business decision-making of enterprises and have no decision-making power over the use of funds.
3. Equity financing refers to selling the ownership of the company to other investors, that is, exchanging the owner's equity for funds. This will involve the management of the company and the distribution of management responsibilities among partners, owners and investors. Equity financing allows the founder to share the profits with other investors instead of repaying them in cash, and investors will share the profits in the form of dividends.