at this stage, the main channels for Chinese enterprises to raise funds are: state financial funds, bank credit funds and non-bank financial institutions.

1. state financial funds

state financial funds refer to funds invested by the state in enterprises in the form of financial allocations, financial loans and shares of state-owned assets, which are usually only available to state-owned enterprises. Government financial capital has a broad source and a solid foundation, which is arranged in the capital budget of state-owned enterprises, and will remain an important channel for raising equity capital of state-owned enterprises in the future.

2. Bank credit funds

Bank credit funds are an important source of financing for various enterprises. Banks are generally divided into commercial banks and policy banks. Commercial banks can provide various commercial loans to various enterprises, while policy banks mainly provide certain policy loans to specific enterprises. Bank credit funds have regular sources of funds such as residents' savings, deposits of enterprises and institutions, and the loan methods are flexible and diverse, so it has become an important source of funds for enterprises.

3. Funds of non-bank financial institutions

Non-bank financial institutions refer to various financial institutions and financial intermediary organizations except banks, mainly including insurance companies, securities companies, leasing companies, finance companies and trust and investment companies. It can directly provide funds for enterprises or provide services for fund-raising. Although the financial resources of this fund-raising channel are smaller than those of banks, the scope of financing is also limited, but its fund supply mode is flexible and convenient, and it can provide other services, so it has broad development prospects.

financing method refers to the specific financing form that can be selected by enterprises when raising funds. Chinese enterprises mainly have the following financing methods: ① absorbing direct investment; (2) issuing stocks; ③ Using retained earnings; 4 borrow money from the bank; ⑤ Using commercial credit; 6. Issuing corporate bonds; ⑦ financial leasing; ⑧ Leveraged acquisition. Among them, the funds raised in the first three ways are equity funds, and the funds raised in the last few ways are debt funds.

financing channels solve the problem of the source of funds, while financing methods solve the problem of how to obtain funds. There is a certain correspondence between them. A certain financing method may only be applicable to a specific financing channel, but funds from the same channel can often be obtained in different ways, and the same financing method is often applicable to different financing channels. Therefore, enterprises should realize the reasonable cooperation between the two when raising funds.

second, financing methods

borrowing:

enterprises can borrow from banks and non-financial institutions to meet the needs of mergers and acquisitions. This method has simple procedures, enterprises can obtain the required funds in a short time, and the confidentiality is also very good. However, enterprises need to bear fixed interest, and they must repay the principal and interest at maturity. If enterprises can't arrange the repayment funds reasonably, their financial situation will deteriorate.

issuing bonds:

bonds enable companies to raise capital, issue securities according to legal procedures and undertake the obligation to pay certain interest and repay the principal within a specified time. This method has great similarities with borrowing, but the sources of bond financing are wider and there is more room for raising funds.

common stock financing:

common stock is the most basic and important share in the capital composition of joint-stock companies. Common stock does not need to repay capital, and dividends do not need to be paid regularly as loans and bonds, so the risk is very low. However, taking this way to raise funds will lead to the dispersion of the original shareholders' control rights.

preferred stock financing:

preferred stock combines the advantages of bonds and common stocks, and there is no pressure to repay the principal when it is due, and there is no need to worry about the dispersion of shareholders' control rights. However, the after-tax capital cost of this method is higher than the after-tax capital cost of liabilities, and although the preferred shareholders bear a considerable proportion of risks, they can only get fixed remuneration, so the issuance effect is not as good as that of bonds.

convertible securities:

convertible securities refer to bonds or preferred shares that can be converted into common shares by holders. Convertible bonds have the benefit of being converted into common stock, so their cost is generally low. After convertible bonds are converted into common stock at maturity, enterprises do not need to repay the principal, but gain long-term capital. However, this method may lead to the dispersion of the company's control rights, and if the stock market rises above the conversion price after the expiration, the company will suffer financial losses.

Stock option financing:

Stock option is a long-term option issued by a company, which allows the holder to buy a certain number of shares at a certain price. It is generally issued together with the company's long-term bonds to attract investors to buy long-term bonds with interest rates lower than the normal level. In addition, in the period of financial austerity and when the company is on the verge of a crisis of confidence, it gives investors a kind of compensation and encourages investors to buy the company's bonds. The difference from convertible bonds is that, Convertible bonds converted into ordinary shares at maturity do not increase the company's capital, and when the warrants are used, the original corporate bonds are not recovered, so the capital flowing into the company can be increased.