Funding is The funding program. Education funding

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:45

Project financing involves the choice of some methods of payment for the costs associated with its implementation, as well as the identification of investment sources with their structure. This method acts as a way to attract resources for investment in order to ensure the implementation of the selected project.

Funding methods

Any funding program provides for the following methods:

- self-financing, investing only from its own resources;

- corporatization and other types of equity financing;

- provision of loans by banking institutions, as well as the issuance of bonds;

- leasing;

- financing from the budget;

- a combination of the various forms of funding listed above;

- project financing.

Project finance

This is a method that needs more attention in this article, becausehow in the economic literature you can find a variety of views on the issue of its composition. One of the main disagreements is the definition of this term. With all the variety of its interpretations, it is necessary to distinguish between a narrow and a broad definition:

- A broad interpretation suggests the following wording. Project financing is a set of methods and forms of providing funds for the implementation of various developments. In this case, this concept is considered as a way to mobilize different sources of resources with the integrated use of the appropriate methods by which the project is financed. It can also be allocated financial resources that are directed only to strictly defined purposes within a specific investment development.

- Narrow definition: project financing is a method of providing resources for certain activities, characterized by the way such investments are returned. It is based only on those cash incomes that are generated by the investment project. Also, this interpretation is characterized by the optimal distribution of risks related to this project by the parties involved in its implementation.

Sources of funds allocation

Any financing of an enterprise and its projects represents monetary resources, which can be divided into equity (internal), as well as borrowed and borrowed capital (external). This article will consider the main forms of such sources in accordance with the objectives of financing specificinvestment projects.

So, internal financing should be provided by an enterprise that plans to directly implement investment developments. With its help, it is supposed to use its own resources in the form of share (authorized) capital. This source can also include the flow of funds generated in the process of carrying out activities by a business entity (net profit or depreciation). At the same time, the accumulation of resources intended for the implementation of any project should have a targeted focus, which is achieved by allocating your own budget for this item of expenditure.

Such financing of the enterprise can be used only for the implementation of medium-sized developments. And capital-intensive projects that require additional investment are mainly financed from additional sources.

External financing is the use of such sources as funds from various financial institutions and non-financial organizations (the state, the population and foreign investors), additional deposits of funds from the founders of a business entity. This investment is carried out by mobilizing funds raised in the form of equity financing and borrowed resources by attracting loan financing.

Sources of raising additional funds: advantages and disadvantages

When implementing various investment projectsa funding strategy should be justified, an analysis of all possible methods and sources of funding should be carried out, and a careful development of a scheme for using additional funds to pay for all costs associated with this area of \u200b\u200bthe subject's activity should be carried out.

Thus, an already approved funding scheme should provide:

- the required amount of investment in the implementation of the developed project both in the total volume and at each individual stage of its implementation;

- optimization of the composition of financial sources;

- maximum reduction of capital expenditures and risks of the project itself.

Education funding

Education is a fairly important sector of the life of society, requiring additional funding in certain amounts. Its sources are:

- budgets of different levels;

- provision of paid services in the field of education;

- scientific activities of such institutions with the subsequent implementation of its results;

- implementation of entrepreneurship of these organizations, not related to scientific activities and education.

Turning to the statistics, it should be noted that today municipal and state financing of education takes about 3% of GDP in GDP, and about 2% of GDP comes from the funds of business entities and the population.

Financial and investment strategy of the organization

This concept implies the presencesets of specific decisions that cover the priorities, choice and magnitude of the use of various sources of additional resources. Such funding is funds aimed at solving technical, marketing, social and managerial strategies. At the same time, the central place is given to the marketing strategy, which significantly induces other components of decisions in other areas (technical, managerial and social). However, these decision-making areas can also be implemented autonomously.