financing

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Financing

The process or means of acquiring capital necessary to conduct a business activity. Two of the most common forms of financing are debt financing and equity financing. In debt financing, one borrows money, usually from an institution, with the promise to return the money with interest at some point in the future. This provides capital to the borrower and a profit to the lender. In equity financing, a company sells portions of ownership to those who are interested. Unlike debt financing, equity financing usually raises capital without incurring liabilities, but the risk exists that the company will not raise enough. An alternative to both debt financing and equity financing, especially for start-ups, is using money from personal savings to pay for activities.

financing

Borrowing money to buy property. See leverage.

References in periodicals archive ?
Financing activity in the Gulf is on the rebound according to economists, the pan-Arab daily AL HAYAT reported Thursday.
This contradiction results in a different presentation of changes in cash and financing activity on the statement of cash flows.
Steady financing activity during March demonstrated that cooperative and condominium boards continue to move ahead to borrow money in the form of first mortgages and lines of credit," commented Mr.
7 million increase in profit from financing activity before provision for doubtful debts.
These trends illustrate that total financing activity and first mortgage originations are steadily increasing while the total number of borrowers is remaining fairly stable.
Even with interest rates on the rise, NCB New York anticipates the high volume of financing activity in 2005 will continue as long as property valuations maintain a steady growth.