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A financing title and thus a bundle of rights and obligations a financial source, that contributes to the financing of an enterprise, acquires.

Examples

A financing title is e.g. the legal claim on interest and repayment of a credit giver or the legal position of a partner of an unincorporated firm or a share.

Detail

External financing is generally understood as expenditure about financing titles by the enterprise. The financial source is the Erwerber of financing titles, of him carried out capital deposit is the price for it.

Most important characteristic of a financing title: its owner acquires a claim on future payments enterprise financing titles can also by the state be spent. The market for financing titles is at the same time the market for capital.

According to kind of the financing titles several kinds of the financing can be differentiated, financing by borrowing on the one hand or participation or insert financing on the other hand. During financing by borrowing demand titles (=Schuldtitel) are spent. The title owner is creditor, the title emitter is debtor. The supplied capital is outside capital with participation or insert financing participation title is spent. The title owners are partner, the applied capital are own capital funds.

Literature

  • Franke/Hax: Financial system of the enterprise and capital market, 5. Aufl.

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