Financing channel refers to the source of funds for assisting enterprises, mainly including endogenous financing and exogenous financing. Among them, endogenous financing mainly refers to the enterprise's own funds and the accumulation of funds in the process of production and operation; Helping enterprises to finance is the external source of funds for enterprises, which mainly includes direct financing and indirect financing. Direct assistance to enterprise financing refers to the activities of initial public offering (IPO), rights issue and additional issuance, so it is also called equity financing. Indirect financing refers to debt financing activities such as loans from banks and non-bank financial institutions, so it is also called debt financing.

With the progress of technology and the expansion of production scale, it is difficult to meet the capital needs of enterprises by relying solely on internal auxiliary financing. External assistance in enterprise financing has become an important way for enterprises to obtain funds. External assistance to enterprise financing can be divided into debt assistance to enterprise financing and equity assistance to enterprise financing.

From the source of raising funds, financing channels can be divided into internal channels and external channels. Details are as follows:

I. Internal financing channels

Internal financing channels of enterprises refer to opening up sources of funds from within enterprises. There are three sources of funds within an enterprise: its own funds, its tax interest and interest payable, and its unused or undistributed special funds. Generally, in enterprise mergers and acquisitions, enterprises choose this channel as much as possible, because this method has good confidentiality and enterprises do not have to pay the borrowing cost, so the risk is very small, but the amount of funds is related to the profits of enterprises.

Second, external financing channels.

External financing channels refer to the sources of funds opened by enterprises from the outside, mainly including: professional bank credit funds, non-bank financial institutions' funds, other enterprises' funds, private funds and foreign capital. Raising funds from outside the enterprise has the advantages of high speed, great flexibility and large amount of funds, so it is generally the main source of raising funds in the process of mergers and acquisitions. However, its disadvantage is poor confidentiality, and enterprises need to bear high costs, resulting in high risks, which should be paid attention to during use.