Financing of the project involves the selection of some of the methods the costs associated with its implementation, as well as identifying sources of investment to their structure.This method serves as a way to attract resources for investment in order to ensure the implementation of the selected project.
Methods of financing
Any financing program provides for the use of such methods:
- self-financing, only invests its own resources;
- shareholding and other forms of equity financing;
- lending by banking institutions, as well as the issuance of bonds;
- leasing;
- funding from the budget;
- a combination of different forms of financing mentioned above;
- project financing.
Project financing
a method that needs more attention in this article, as in the economic literature can meet a variety of views on the issue of its composition.One of the main differences is the definition of the term.Despite the diversity of its interpretation is necessary to select a narrow and a broad definition:
- Broad interpretation suggests the following wording.Project financing - a set of methods and forms of providing funds the implementation of various projects.In this case, the concept is seen as a way to mobilize different sources of resources integrated use of appropriate methods, which is funding the project.Also, it can be allocated financial resources that are directed only at strictly defined goals within a particular investment development.
- narrow definition: project financing - a method of resourcing of certain areas of activity, characterized by way of repayment of such investments.At its heart are only those revenues, which are generated by the investment project.Also for this treatment is characterized by an optimal distribution of related with the project risks the parties involved in its implementation.
Sources allocation of financial resources
Any funding for the company and its projects is the financial resources that can be divided into equity (internal), as well as debt and capital employed (external).This article will discuss the main forms of such sources in accordance with the objectives of the financing of specific investment projects.
So, domestic funding should be provided by the company, which plans to direct the implementation of investment projects.With it planned to use its own resources in the form of a joint stock (authorized) capital.To this source can be ranked and the flow of funds generated in the course of business entities (net income or depreciation).This pooling of resources for the implementation of any project should have a target orientation, which is achieved through the provision of its own budget for this expenditure.
Such financing of the enterprise may be used only in the implementation of medium-sized projects.A capital-intensive projects requiring additional investment, mainly financed by additional sources.
External funding - is the use of such sources as a means of various financial institutions and non-financial institutions (the state, the population and foreign investors), additional cash contributions of the founders of a business entity.This investment is carried out by means of the mobilization of funds raised in the form of equity financing and debt resources through attracting credit financing.
Sources of additional funds: advantages and disadvantages
With the implementation of various investment projects must be justified funding strategy, an analysis of all possible methods and sources of funding, and should be a thorough development of the scheme involvement of additional funds to pay for all costs associated with theAccording to the activity of the subject.
So, already approved financing scheme should provide:
- necessary volume of investment in the implementation of the project developed both in total and at each stage of its implementation;
- optimizing the structure of financial sources;
- maximum reduction of capital costs and risks of the project.
Education Financing Education is quite an important sector of society, requiring additional funding in specific quantities.His sources are:
- budgets of different levels;
- provision of paid services in the field of education;
- scientific activities of such institutions with the subsequent implementation of its results;
- implementation of business of these organizations, non-scientific activities and education.
Referring to statistical data, it should be noted that today the municipal and state funding for education takes in the order of 3% of GDP, as a means of economic entities and the population in this area receives about 2% of GDP.
Financial and investment strategy of the organization
This concept requires a specific set of solutions that encompass priorities, choices and values of the use of all possible sources of additional resources.Such financing - a means to address the technical, marketing, social and governance policies.In this central place is given to a marketing strategy that significantly induces other components making in other areas (technical, administrative and social).However, these areas of decision-making, and can be implemented independently.
