What is Targeted Financing? Are Targeted Financing Programs Legal

Targeted financing is the act and process of raising funds for a business. That is, according to the company's own production and operation conditions, the status of capital ownership, and the needs of the company's future business development, through scientific decision-making, through a certain way, from a certain channel to the company's investors and creditors to raise funds, to ensure the company's normal production needs, business management activities need to financial behavior. The motivation of the company to raise funds should follow certain principles, through certain channels and in certain ways.

Targeted financing plans refer to investment and financing products issued by legally established enterprises, public institutions, legal persons, partnerships or other economic organizations to specific investors and agreed to repay principal and interest within a certain period of time. Its essence is to be reviewed and approved by local financial offices, for the purpose of supporting the development of the real economy, in compliance with relevant laws, regulations, and policies to carry out business. Each product issued by the gold exchange needs to be filed with the local financial office.

The private placement plan business is not a private placement in the traditional sense.

Qualified investors can only subscribe and receive the products after they have registered as members of various financial asset exchanges or financial asset trading centers, and the risk assessment results match the risk level of the products. The total number of investors in the same type of targeted financing plan product (with the same filing number) shall not exceed 200.

Issuance of a targeted financing plan.

Similarities and differences between targeted financing plans and traditional asset management products.

The legitimacy of the company can be determined through two aspects: (1) whether it is registered with the industrial and commercial bureau can be inquired by hail to the industrial and commercial bureau where the company is located; You can also log on to the State Administration for Industry and Commerce's National Enterprise Credit Information Publicity System to inquire about (2) whether the business scope exceeds the statutory scope and operates within the scope of the company's business license, which is a legal business; To operate in a specific industry, you also need to hold a business license.

1. What are the main forms of debt financing?

According to the main categories, there are two types of financing methods for enterprises, debt financing and equity financing. Debt financing refers to the financing of enterprises through borrowing, and the funds obtained by debt financing, the enterprise needs to pay interest and repay the principal to the creditor after the loan matures. Equity financing refers to the financing method in which an enterprise introduces new shareholders by transferring part of the ownership of the enterprise and increasing the capital of the enterprise.

The company does not need to repay the principal and interest of the funds obtained from equity financing, but the new shareholders will share the profits and growth of the enterprise with the old shareholders.

1) Debt financing only obtains the right to use the funds rather than ownership, and the use of debt funds has a cost, and the enterprise must pay interest and repay the principal when the debt matures.

2) Debt financing can improve the rate of return on capital of enterprise ownership funds and has financial leverage.

3) Compared with equity financing, debt financing generally does not give rise to the problem of control over the enterprise, except for some specific circumstances that may bring about the control and intervention of creditors in the enterprise.

2. How to finance small and medium-sized enterprises.

1) Bank Loan Financing:

Bank loans are one of the most formal forms of financing.

2) Private financing:

Compared with formal financing, the providers of private financing have a better understanding of the borrower's credit and income status, thus overcoming the moral hazard and adverse selection caused by information asymmetry.

3) Financial leasing:

Financial leasing is a kind of medium and long-term fixed asset financing, the time is generally 3 to 5 years, and because financial leasing has the convenience of allowing the lessee to repay the rent in advance, financial leasing has the advantages of short-term financing.

4) Golden Shell Loan Skillful Shirt Payment:

Golden Shell is an unsecured and unsecured microloan loan insurance product.

5) Inventory Financing:

Specifically, inventory financing provides a mechanism through which the lender can receive more information about the inventory in storage and exercise a higher level of control over the inventory in storage.

6) Accounts receivable financing:

Accounts receivable financing is a financing method with distinctive characteristics.

7) Establishment of a guarantee company:

One of the bottlenecks in the financing of small and medium-sized enterprises is the difficulty of guarantee, so it is not necessary to participate in the investment or lending of small and medium-sized enterprises on a large scale, but in the form of guarantee guidance.

In the development of the market, an enterprise borrows and finances from a large financial institution with strong strength due to its business development, and after the financing guarantee agency provides the guarantee and the mortgage or pledge of the borrowing enterprise, the large financial institution will lend the funds to the enterprise after the financing guarantee agency provides the mortgage or pledge of the borrowing enterprise. At this point, the financial institution has the right to benefit from these underlying assets. Due to the development of business and self-development, the financial institutions holding these basic assets will list the right to benefit from these basic assets on the legal trading venue to transfer the right to income to achieve asset **, which is the transfer of the right to income.

Legal analysis: the directional financing plan is essentially a direct financing method for non-public issuance through the gold exchange, so it has a private nature, and the holders of each product shall not exceed 200 people. In disguise, the policy red line such as the 200-person private placement limit was broken, resulting in the transformation of private placement products into public offerings, and the 200-person limit was broken in disguised form in various ways such as "large demolition", "**", "installment", etc. That is, it is issued to an unspecified object.

The directional financing plan essentially provides a lending relationship, requiring qualified investors to lend money directly to the issuer, and the root of the lending relationship is to repay the loan and pay interest at maturity, which is equivalent to the commitment of capital preservation of illegal fundraising, and the essential feature of the mutual finance platform is that it is oriented to unspecified network investors (that is, the unspecified public), so once the directional financing plan of the financial exchange is combined with the mutual finance platform, it may be suspected of illegal fundraising with the promise of guaranteed principal and interest payment and public publicity to the unspecified public.

Legal basis: Regulations on the Supervision and Administration of Financing Guarantee Companies

Fourth provinces, autonomous regions and municipalities directly under the Central Government to determine the departments (hereinafter referred to as the supervision and management departments) is responsible for the supervision and management of the financing guarantee company in the region. The people of provinces, autonomous regions and municipalities directly under the Central Government are responsible for formulating policies and measures to promote the development of the financing guarantee industry in the region, disposing of the risks of financing guarantee companies, and urging the supervision and management departments to strictly perform their duties. Establish an inter-ministerial joint meeting on the supervision of financing guarantee business, which is responsible for formulating a management system for the supervision and management of financing guarantee companies, coordinating and solving major problems in the supervision and management of financing guarantee companies, and urging and guiding local people to supervise and manage financing guarantee companies and deal with risks.

The inter-ministerial joint meeting on the supervision of financing guarantee business is led by the banking regulatory authority and attended by relevant departments.

Fifth State to promote the establishment of the best financing guarantee system, the development of the best support of the financing guarantee company, the establishment of the first banking financial institutions, financing guarantee company cooperation mechanism, expand the scale of financing guarantee business for small and micro enterprises and agriculture, rural areas, farmers and maintain a low rate level. The people's financial departments at all levels through capital investment, the establishment of a risk-sharing mechanism, etc., mainly for small and micro enterprises and agriculture, rural areas, farmers to serve the financing guarantee company to provide financial support, specific measures by the financial sector to formulate.

1. Because it is suspected of non-Sui Rufa fundraising.

The targeted financing plan is a kind of financing wealth management product launched by local financial asset exchanges in recent years, which refers to the direct financing wealth management products issued by relevant enterprises to specific investment groups and agreed to repay principal and interest within a certain period of time.

The directional financing plan is essentially a direct financing method for non-public issuance through the gold exchange, so it has a private nature, and the holders of each product shall not exceed 200 people. In disguise, the policy red line such as the 200-person private placement limit was broken, resulting in the transformation of private placement products into public offerings, and the 200-person limit was broken in disguised form in various ways such as "large demolition", "**", "installment", etc. That is, it is issued to an unspecified object.

The directional financing plan essentially provides a lending relationship, requiring qualified investors to lend money directly to the issuer, and the root of the lending relationship is to repay the loan and pay interest at maturity, which is equivalent to the commitment of capital preservation of illegal fundraising, and the essential feature of the mutual finance platform is that it is oriented to unspecified network investors (that is, the unspecified public).

Of course, even if they do not cooperate with the mutual fund platform, many local gold exchanges will break through the 200-person limit in disguise through the method of "installment", and whether this method is suspected of illegal fundraising remains to be further discussed.

2. Because of the alleged transfer of benefits.

3. Because it is suspected that the listed company maliciously collects money.

Targeted financing refers to a product model in which legally registered companies, enterprises and other commercial entities in China directly raise and transfer funds in a non-public manner within the territory of China, and agree to repay the principal and interest within a certain period of time. It is also known as "Targeted Financing Plan Instrument", "Targeted Debt Financing Instrument", "Direct Financing Plan Product", etc.

Secondly, the targeted financing model has three characteristics:

The first is that the structure is clear and simple, mainly four parties, financing parties, guarantors, management agencies, and filing agencies.

The second is that the operation is flexible and convenient, with the financier as the investment target, and the investment money is directly transferred to the designated account of the financier. (Note: OTC mode).

Third, risk control management is easy, and the core of risk control lies in the credit status of the financing party, and the risk control system is built based on the situation of the financing party.

The typical product architecture diagram of the directional financing model is as follows:

Directional financing is also a private placement, that is, an issuance to specific investors, also known as a non-public offering, which is actually a common overseas private placement, which has long existed in China.

However, as a new policy first introduced under two major backgrounds - that is, the formal implementation of the new "** Law" and the full circulation of shares after the share reform - today's non-public offering has undergone qualitative changes compared with the previous private placement. Characteristics of private placement In the "Measures for the Administration of Refinancing" (draft for comments) issued by the China Securities Regulatory Commission in 2006, there are no other conditions for non-public offerings, except for stipulating that the issuance object shall not exceed 10 people, the issue price shall not be less than 90% of the market price, the issuance of shares shall not be transferred within 12 months (36 months for major shareholders to subscribe), and the purpose of the fund-raising shall comply with the national industrial policy, and the listed company and its executives shall not have violations, etc., there are no other conditions, that is, there is no profit requirement for non-public offerings. Even loss-making companies can apply for issuance. The biggest advantage of non-public issuance is that major shareholders and large investors with strong risk tolerance can transfer funds to listed companies at a price close to the market price, or even more than the market price, so as to minimize the investment risk of small shareholders.

Since the maximum 10 investors participating in the orientation have a clear lock-up period, generally speaking, listed companies that dare to propose a non-public additional issuance plan and have been accepted by large investors will usually have better growth. The non-public offering will also become an important means and booster for mergers and acquisitions. There are two scenarios here:

One is that large investors (such as foreign investors) want to become strategic shareholders of listed companies, or even become controlling shareholders. In the past, there was no private placement, and they could only buy shares from major shareholders (such as Morgan Stanley and the International Finance Corporation's joint acquisition of Conch Cement's equity), and the money taken out by the new shareholders went into the pockets of the major shareholders, which had little direct effect on strengthening the listed company. It is believed that as long as a few companies take the lead, the entire market can be greatly enlivened and a variety of new concepts and themes can be created.

The other is to acquire others after private placement financing to rapidly expand the scale.

Targeted financing is aimed at specific natural persons or institutions and organizations to absorb funds and develop their own enterprises. Of course, it is also necessary to export certain benefits.

Targeted financing means that the direction of use of the raised funds is determined in advance and cannot be misappropriated, and the funds must be earmarked.

The method of financing only a few specific shareholders is called targeted financing.

Issuance of shares to a few designated institutions.

The private placement plan is a private placement.

Investors can only subscribe and receive the products after they have registered as members of the Center and the risk assessment results match the risk level of the products. Investors must buy and sell the same Targeted Financing Plan product (the same product**) at least 5 trading days apart, and each product cannot be held by more than 200 holders.

The above requirements have been publicized in the Prospectus of the Product and the trading rules announced by the Exchange.

Directional financing, also known as private financing, refers to a non-public offering, which only raises funds to a specific number of investors and is limited to circulation and transfer within the scope of specific investors.

In a narrow sense, financing is the act and process of raising funds for an enterprise. That is, according to the company's own production and operation conditions, the status of capital ownership, and the needs of the company's future business development, through scientific decision-making, through a certain way, from a certain channel to the company's investors and creditors to raise funds, to ensure the company's normal production needs, business management activities need to financial behavior.

Financing in targeted financing is a concept of financing in a narrow sense. From the perspective of the flow of funds, financing and investment usually appear together, and the financing party is the capital inflow party, and the investor is the capital outflow party.