|
|||||||||||
| > INVESTMENT > Financing model |
Major growth in turnover and yield is the pre-requisite for adequate internal finance strength. Shorter product life cycles and a growing risk of product and service acceptance perpetually intensify the situation of the enterprises on a daily basis.
Due to market globalization, shorter development intervals and the increasing capital intensity of required manufacturing equipment, internal financing is – in many cases - not an option for many enterprises.
Classical credit financing is based upon the static element of borrowing against securities. Investments are leased or rented in order to avoid tying-up capital and to finance growth and change.
Therefore, the crucial starting-point for equity capital financing is the utilization of market and growth opportunities above and beyond the limits of internal and external financing.
In the United States and in Great Britain, alternative financing and investment models have been intensively utilized for many years.