1, bank credit
Bank credit is an indirect loan, divided into policy loans, general loans, special loans, enterprise loans from the bank is mainly used for the development of the project on the occupation of long-term funds, the bank, as a creditor, has the right to intervene in the enterprise's use of funds and the protection of bond assets.
Policy loan refers to the policy banks in the People's Bank of China to determine the total annual scale of the loan, according to the application of the loan project or enterprise situation in accordance with the relevant provisions of the independent review, issued to the enterprise's loan. Policy loans are the main asset business of Chinese policy banks at present, which are issued to high-quality enterprises and high-quality projects fostered by the state, and are characterized by low cost, stable source of payment and low risk. However, the national policy loans have limitations such as quota restriction, strict audit program, etc., which makes it difficult for enterprises to apply for them and the quota is limited.
General loans and special loans refer to the bank's general loan business, special loans require enterprises to invest in specialized projects, general loans do not require supervision of the direction of the use of funds. Bank loans are generally credit loans, do not require material collateral, the bank for the enterprise's credit line depends on the main business indicators, usually credit line for the previous year's balance sheet operating income of 10% - 20%. The general requirements for bank loans are as follows:
①Financial structure:
The ratio of net assets to year-end loan balance is greater than 100%.
The gearing ratio is less than 70%.
②Solvency:
Current ratio of 150% to 200% is better; quick ratio is better; guarantee ratio of less than 0.5 is good; cash ratio is greater than 30%.
3 cash flow
Cash flow from business activities is positive, cash back in 85% - 95% or more, payment of purchases of goods, labor, cash payment rate should be 85% - 95% or more.
④Operating ability
The growth rate of the main business is not less than 8%; the turnover rate of accounts receivable is about 6; the turnover rate of inventory is more than 5.
⑤Operating efficiency
Operating profit is more than 8%; the return on net assets is more than 5%; and the guaranteed multiple of interest is more than 400%.
The above requirements as a general general requirements, not as a hard and fast rules and loan approval criteria.
The advantages of using bank loans are low cost and sufficient funds. The main disadvantage is that the bank lending prudent and strict supervision of funds, there are changes in interest rates of borrowed funds, the national macroeconomic and industrial economic and technological policy adjustments, borrowed funds invested in the project has been a relatively large market changes that lead to the bank can not be repaid on time borrowing and other risk factors. In summary, for most enterprises can not rely on bank credit as the main way of financing.
2, corporate bonds
Bond financing refers to the enterprise through the sale of bonds to individual or institutional investors to raise working capital or capital expenditure. Enterprise bonds are usually also known as corporate bonds, is issued in accordance with legal procedures, agreed to a certain period of time to repay the principal and interest bonds. Corporate bonds represent a debt relationship between the issuing company and the investor.
General requirements for the issuance of corporate bonds:
1) the net assets of the limited company of not less than 30 million yuan, limited liability company's net assets of not less than 60 million yuan;
2) the cumulative balance of corporate bonds after the issuance of not more than 40% of the amount of the net assets of the end of the most recent period;
3) the company's production and management in line with laws, administrative regulations and the Articles of Association of the Company, and the investment of the funds raised is in line with the national industrial policy;
④The average annual distributable profit realized in the last three fiscal years is not less than one year's interest on the corporate bonds;
⑤The interest rate of the bonds does not exceed the level of interest rates stipulated by the State Council;
6The Company's internal control system is sound and there is no major deficiency in the completeness, rationality and effectiveness of the internal control system, reasonableness and effectiveness of the internal control system;
⑦ The bonds have been rated by a credit assessment agency and the credit rating of the bonds is good.
Enterprise bond issuance requires the approval of the China Securities Regulatory Commission, if the state-owned enterprises also need the approval of the State Council organs, the application procedures are more complex, the general law usually takes 3 - 6 months of operation time.
Enterprise bond issuance can adjust the structure of corporate assets and liabilities, increase financial leverage, larger amount of financing. But bond financing as a form of debt financing, the requirements of the agreement in accordance with the repayment of principal and interest, the enterprise's cash flow requirements are higher, if insolvent, the enterprise will face the danger of bankruptcy, in this sense, the enterprise bond also has a greater risk.
3, special bond financing
In April 2015, the Ministry of Finance issued the Interim Measures for the Administration of Local Government Special Bond Issuance to strengthen local government debt management. Special government bonds are differentiated from general government bonds, issued for public welfare projects with a certain amount of revenue, and repaid by government funds or special revenues, with a higher level of security.
Government special bonds are mainly divided into four types:
①Special bonds for urban underground comprehensive pipeline corridor construction. Focusing on supporting urban underground comprehensive pipeline corridor construction projects, the validity period of the approval document can be extended from one year to two years for comprehensive pipeline corridor construction projects with a construction period of more than five years.
②Special bonds for strategic emerging industries. Encourage energy saving and environmental protection, a new generation of information technology, biology, high-end equipment manufacturing, new energy, new materials, new energy vehicles and other areas of qualified enterprises to issue bonds, focusing on supporting the "second five" National Strategic Emerging Industries Development Plan, "clearly defined in the twenty industry innovation and development projects, allowing no more than 50% of the raised funds No more than 50% of the proceeds are allowed to be used for repaying bank loans and supplementing working capital.
③Specialized bonds for pension industry. Focusing on supporting senior care projects, the bond funds can be used to renovate senior care facilities of other social institutions, or to acquire idle public facilities such as government-owned schools, hospitals, and nursing institutions and transform them into senior care facilities.
4 special bonds for urban parking lot construction. Focus on supporting urban parking lot construction projects, encouraging the issuance of bonds for the acquisition of completed parking lots for unified management.
4, bridge loans
Bridge loans, also known as bridge funds, bridge funds is a short-term financing, the term is usually limited to six months, is a kind of long-term funds relative to the funds, belongs to the category of short-term borrowing, borrowing enterprises can use it to provide security for the long-term low-cost financing arrangements, or to pay off the existing debt, or to realize the capital operation of a transitional period of time Special purpose. This type of loan financing is mainly to solve short-term problems, capital shortfalls, historical problems, and is expected to be recovered more quickly in the future with, for example, long-term loans, corporate bonds or other financing.
The interest rate for bridge financing is usually high, sometimes several times higher than the bank credit rate for the same period, and requires assets such as equity and real estate to be pledged. In short, bridge funding is an effective tool to make the timing of the purchase of direct capitalization, with fast recovery and transitional nature.
Two, lease financing
Lease financing is commonly known as financial leasing, is currently one of the most common and basic forms of non-debt financing in the international arena, through the development and innovation, the traditional subject matter of leasing, such as equipment, machinery and so on, has now been extended to other assets, such as street lights, pipe networks and so on, so as to provide financing for the enterprise in two directions, one is as a lessee for financial Leasing, that is, the traditional leasing method, the other is the sale and leaseback method of financing funds, that is, the enterprise will first sell the assets to the leasing company, and then leased back in the form of financial leasing of the emerging leasing financing model.
Enterprises need a certain equipment, you can directly contact the financial leasing company, the leasing company to contact the manufacturer, funding the purchase of equipment, and then delivered to the enterprise to use, the enterprise to pay rent on a regular basis, after the expiration of the agreed period of time, the payment of a nominal price to obtain the ownership of the equipment. Financial leasing is a set of financing, financing, trade, technology updating and integration of the way, when the use of equipment in the process, the enterprise has financial problems to pay rent difficulties, leasing companies can sell back and deal with the leased goods, so in the handling of the financing of the enterprise creditworthiness and guarantee requirements than the bank credit low, does not affect the credit status of the enterprise, does not take up the enterprise loan credit line, very suitable for the financing of the productive enterprises, reduce the cost of capital utilization and interest rate risk. The cost of capital occupation and interest rate risk.
Four types of traditional financial leasing:
①Direct financial leasing, i.e., the traditional leasing method with equipment as the subject matter.
② leveraged financial leasing, financing is similar to the traditional way, in the funding provider, usually led by a leasing company as the backbone of the company, for a mega leasing project financing, the backbone of the company to provide funds not less than 20%. Generally used for aircraft, ships, communications equipment and large sets of equipment rental finance leasing.
③ entrusted financial leasing, financing in the same way as the traditional way, but the lessor and the lessee and the principal signed a written commission, on behalf of the operation, in the leasing period of the ownership of the subject matter of the lease to the principal, the lessor will only charge a fee, do not bear the risk. The characteristics of this entrusted lease is to have capital and no lease operating right of the enterprise can "borrow the right" to operate.
4 project finance lease, the lessee to the project's own property and benefits as a guarantee, and the lessor signed a financial lease contract, the lessor of the project outside of the property and income without recourse, the rent can only be charged to the project's cash flow and benefits to determine. Usually communication equipment, large medical equipment, transportation equipment and even highway operating rights can be used in this way.
The lessor uses the purchase price of the leased object as the basis for calculating rent according to the time the lessee occupies the lessor's funds, and calculates the rent according to the interest rate agreed upon by both parties. The entire rent is equal to the purchase cost of the leased object plus the lease financing interest during the lease period, the general market interest rate for financial leasing is about 10% - 16% of the acquisition cost of the object.
Three, equity financing
Equity financing refers to the company through the sale or other transactions of the company's shares (or stocks) to obtain funds for production and operation of the enterprise and the development of capital financing. The essential difference between equity financing and other financing methods is that the company's equity changes, the capital provider through the purchase of the company's equity and become a shareholder of the company, enjoy the rights of shareholders, shareholders obligations. Equity financing includes capital increase, issuance of shares (or stocks), share placement, debt-to-equity conversion and so on. Equity financing, as the main financing method of enterprises, is an important financing means for enterprises to realize rapid development.
1, the advantages and disadvantages of equity financing
Compared with debt financing, the advantages of equity financing are mainly manifested in:
①Capital Advantage, the capital absorbed by the equity belongs to the equity capital, which does not need to bear the obligation of repayment of capital and interest, and the risk is low.
②Strategic investor advantage, you can join high-quality enterprises for strategic cooperation, broaden market channels, government relations advantage, technological advantages, etc., to produce synergistic effects and grow the company.
The main defects are:
①From the level of control and management, it will dilute the company's shareholding, control and income.
②Differences between shareholders on major issues such as the company's strategic development can lead to management crisis and the breakdown of cooperation.
3) On the face of the management, different shareholders of the company may produce investment behaviors that benefit themselves to the detriment of other shareholders, creating a conflict of interest.
2, equity financing
Four, project financing
Project financing refers to the lender to a specific project to provide more than 1 year of borrowed funds to the project operating income debt repayment obligations in the form of financing, project financing belongs to the category of debt financing. More accurately, refers to the borrower in the name of the construction project to raise funds, and the project's expected cash flow and future earnings, their own property and ownership interests in debt or guarantee and as a source of repayment of the loan funds a form of financing. In essence, the lender for the cash flow generated by the project has the right to repayment of debt claims, and the project assets as collateral security to control the credit risk of the lender.
Project loans began in the 1930s by the U.S. oil field development projects, and then gradually expanded, mainly used for the development of three major types of projects: resource development, infrastructure construction, manufacturing, etc., and is now more widely used in oil, natural gas, coal, copper and other mineral resources development. As it does not require credit or property for guarantee or repayment commitment from government departments, the loan is issued to the project company, which is specifically set up to finance and operate the project.
1, the classification of project financing
Project financing to the project's assets, expected returns or interests as collateral for a non-recourse or limited recourse financing or loans, in accordance with the presence or absence of recourse can be divided into the following two kinds:
①Non-recourse project financing. This means that the lender has no recourse to the promoter of the project company and can only rely on the revenue generated by the project as the only source of debt service. At the same time, the lending bank has no recourse to the sponsor of the project. For financial institutions, non-recourse project financing is risky, requires higher loan costs, and is currently applied less.
②Limited recourse project financing. Limited recourse project financing generally refers to only in the construction and development phase of the project lenders have the right to recourse to the project sponsor, and through the completion of the acceptance criteria for production, the project enters the normal operation phase, the loan becomes non-recourse. Therefore, limited recourse project financing, in addition to the operating income of the loan project as a source of repayment and the security of the property rights acquired by the project, the lending bank also requires a third party other than the project entity (e.g., the project sponsor) to provide a guarantee, and the lending bank has the right of recourse to the third-party guarantor. However, the liability of the guarantors to assume the debt is limited to the amount of the security provided by each of them, so project financing known as limited recourse requires strict justification of the project. In modern project finance in kind, most project finance is limited recourse.
2, the mode of project financing
①Direct project financing.
It refers to the investors of the project directly to the domestic banks and other financial institutions to apply for loans, obtain more than one year of credit funds, in accordance with the loan agreement by the project investor to repay the loan and interest financing directly, regardless of the success or failure of the project itself, by the project investor, to repay the project loan. This is the most common and simple project financing method used by enterprises, usually requiring assets other than the project or third-party collateral security, creditors have full recourse to the debt, even if the project fails, the project investor must also repay the loan.
②Indirect project financing
Introduction of project financing means that the investor establishes a project company, and the project company to undertake project financing, project construction, production and operation, product sales, debt repayment responsibilities. This way is the narrow concept of project financing, generally does not include direct loans to the bank, because of its professionalism in operation and project management applicability and standardization, is a more efficient method of management.
③Product Payment
A form of financing in which the debt is repaid directly with the project product after the project is put into operation, without using the cash from the sales revenue of the project product to repay the debt. Mainly used in the United States oil, natural gas, mineral extraction, which is characterized by: used to settle the debt principal and interest of the only source is the project's products, the loan repayment period should be shorter than the project's effective production period, the lender of the project operating costs do not bear direct responsibility.
④BOT financing
BOT is "Build-Operate-Transfer", which means that the governmental department signs a concession agreement with a private enterprise (project company) for a certain infrastructure project and grants the contracting party's private enterprise (including foreign enterprises) to undertake the investment of the project. Foreign companies) to undertake the investment, financing, construction and maintenance of the project, and within the concession period stipulated in the agreement, to permit them to finance the construction and operation of a specific public infrastructure, and to allow them to recover their investment and earn profits by charging fees to users or selling products to pay off loans. The government has the right to supervise and regulate this infrastructure, and at the end of the concession period, the private enterprise of the contracting party transfers the infrastructure to the governmental department without charge or compensation.
⑤TOT Financing
TOT, or "Transfer-Operate-Transfer", is a popular way of financing projects internationally, and is often used to It means that the government department or state-owned enterprise will transfer the property right or operation right of the constructed project for a certain period of time to the investor for a fee to operate and manage the project; the investor will recover all the investment and get a reasonable return through the operation within the agreed period of time, and after the expiration of the contract between the two parties, the investor will return the project back to the government department or the original enterprise as a kind of financing method.
6 PPP financing
refers to the field of public **** services, the government to take a competitive approach to select the social capital with investment, operation and management capabilities, the two sides in accordance with the principle of equal negotiation to enter into a contract, the social capital to provide public **** services, the government based on the results of the evaluation of the performance of the public **** services to the social capital to pay the price, under the model to encourage the private sector, private capital cooperation with the government, to participate in the public **** services, to encourage the private sector, private capital and government cooperation, to participate in the public **** services. capital to cooperate with the government and participate in the construction of public **** infrastructure. Compared with BOT, the main feature of narrow PPP is that the government is more y involved in the construction, management and operation process in the middle and late stages of the project, and the enterprises are more y involved in the pre-project stages such as scientific research and project establishment. Both the government and the enterprise are involved in the whole process, and both parties cooperate for a longer period of time, and the information is more symmetrical.
⑦PFI financing
That is, the Private Finance Initiative (PFI), the meaning of which is that government departments, based on the social demand for infrastructure, put forward projects that need to be constructed, and the private sector, which has been awarded a concession, carries out the construction and operation of the public ****infrastructure project through bidding and returns the operated project intact and debt-free to the government at the end of the concession period (usually around 30 years), while the private sector receives a concession from the government department for the construction and operation of the public ****infrastructure project. A project financing method in which the private sector receives fees from the government or from the service recipient to recover costs.
The FPI model and the PPP model are two modes of private intervention in the field of public ****investment that have been developing relatively fast abroad in recent years, and although they are still in their infancy in China, they have a good role to learn from them.
8 ABS financing
that is, asset-based securitization financing, refers to the project owned assets as the basis for the project assets can be brought to the expected return as a guarantee, through the issuance of bonds in the capital market to raise funds for a project financing. In a nutshell, it is "a securitization financing method backed by the assets belonging to the project". Characteristics:
(1) The biggest advantage of ABS financing mode is that it raises funds by issuing bonds in the international market, and the interest rate of bonds is generally lower, which reduces the cost of financing.
(2) Raising funds through the issuance of bonds in the securities market is a distinctive feature that makes ABS different from other project financing methods.
(3) ABS financing mode isolates the project original equity holders from their own risks so that the funds for repayment of bond principal and interest are only related to the future cash income of the project assets, coupled with the fact that bonds are issued in the international market and purchased by a large number of investors, thus diversifying the investment risk.
(4) The ABS financing model raises funds through the issuance of high-grade bonds by the SPV, a liability that is not reflected on the original equity holder's own balance sheet, thus avoiding restrictions on the quality of the original equity holder's assets.
(5) As a securitization project financing mode, ABS is able to enter the international high-grade securities market and issue high-grade bonds that are easy to sell and transfer and have strong discounting ability due to the measures taken to increase the credit rating through the use of an SPV.
(6) As the ABS financing mode is to raise funds in the high-grade securities market, its contact with the international first-class securities institutions, which is conducive to the training of the host country in the international project financing professionals, but also conducive to the standardization of the domestic securities market.