Methods of financing
Companies are financed through both equity and debt. Debt financing is more desirable than taxpayers’ expected returns due to tax savings and lower rates. Financing of small and medium-sized companies is mainly done in the form of debt-based financing and stock-based financing. Small companies grow over time and need more financial resources. Also, as the company’s productivity increases, debt-based financing is limited and stock-based financing is replaced.
Stock-based financing
Stock financing is the process of raising capital through the sale and transfer of shares in an economic entity, which typically leads to the sale of ownership shares to raise and raise capital. Shares are issued directly based on the amount of investment, so that the person who has made the most investment takes control of the company.
Start-up companies use several stock-based financing courses to become large and successful companies. Because startups attract different types of investors at different stages of their development, they can also use different equity-based financing tools. Stock-based financing is mainly done remotely by the following method.
General financing
The stock-based financing process is carried out under the rules and regulations of the Stock Exchange and Securities Organization. Such regulations are primarily intended to protect public investors from transparency in capital and financial income. Therefore, stock financing generally contains a lot of information that should help the investor make an informed decision. This information includes company activities, employee and manager details, financial income, risk factors and financial statements.
Private financing
This method, which is commonly used by small businesses, uses the financial resources of angel investors or venture capitalists for private financing, in exchange for which the company’s shares are transferred. Private equity offering is the simplest and most common type of stock-based financing for start-ups and start-ups. In this method, there is no need for official registration in the Exchange and Securities Organization.
Debt financing:
If an enterprise needs financing and does not want to lose ownership of its company, it can borrow the money needed for its economic purposes. Apart from the method of borrowing from the banking system in the capital market, there are other financing instruments that are formed without inviting new partners and are based on borrowing money. When the company uses these tools, it has chosen the debt-based financing method, which Helder Financial Group facilitates by providing a suitable platform.
Types of debt-based financing methods in the capital market:
Rental sukuk
Bonds
سکوک مرابحه
Benefits
Sukuk Mudaraba
Sukuk buy debt
Mortgages
Sukuk made to order
Commodity certificate
Special deposit certificate
Standard parallel futures
Subordinate sales options
Although debt-based financing methods are very diverse in the capital market, some of them are more widely used. They use it on debt.