Funding title

An investor who contributes to the financing of a company acquires a financing title and thus a bundle of rights and obligations .

Examples

A financing title is e.g. B. the legal right to interest and repayment of a lender or the legal position of a partner in a partnership or a share .

Details

External financing is generally understood as the issuance of financing titles by the company. The investor is the purchaser of financing instruments, the capital contribution made by him is the price for it.

The most important characteristic of a financial instrument: its holder acquires an entitlement to future payments from the company. Funding titles can also be issued by the state. The market for finance stocks is also the market for capital.

Depending on the type of financing title, several types of financing can be distinguished, loan financing on the one hand or equity or deposit financing on the other. In the case of credit financing, receivables (= debt) are issued. The title holder is the creditor , the title issuer is the debtor . The capital injected is outside capital . Equity titles are issued for equity or deposit financing. The titleholders are shareholders, the capital raised is equity .

literature

• Günter Franke, Herbert Hax : Finance of the company and capital market. 5th revised edition. Springer, Berlin et al. 2004, ISBN 3-540-40644-1 ( Springer textbook ).