Investments are investments of financial resources or material values in the reproduction process for obtaining a certain benefit in the planned time period. Investments can be with external sources of income, internal - specially created funds of the enterprise, and individual (personal funds of individuals).
External sources of investment
External borrowed funds such as bank and government loans (short-term and long-term) are external sources of investment, which can be both financial and material.
When investing in a project, the state can provide preferential taxation - a decrease in income tax rates, exemption from VAT, free use of means of production. This will make it possible in the planned time period to use the saved tax funds in the development of the project.
When using external sources of investment, the company and investors bear certain financial risks. Even in the conditions of an investment project that is ideally developed and economically justified in the investment policy of an enterprise, it is impossible to 100% guarantee the receipt of income in the specified amounts in the planning period. In the best case, obtaining the planned profit will be achieved in a longer time period.
Internal sources of investment
The most favorable option for the development of an enterprise or the implementation of a project are internal sources of investment. One of these sources of attracting funds can be called depreciation charges, which in themselves are aimed at restoring the company's fixed assets. This is the repair and renovation of equipment, construction of buildings and structures involved in the main production.
In addition, special financial development funds are created at enterprises, which switch funds on special accounts. These funds will subsequently be used as investments in project development or enterprise development. A part of the company's profits, money transfers from insurance companies, charitable gratuitous monetary investments can also be received on the accounts of development funds.
An internal source of investment can be the company's shareholders by stopping payments on their shares for a certain period.
When using internal sources of investment, the company is not liable to external investors. This allows you to develop the project in a more relaxed mode of operation, to make the necessary adjustments to the investment plan, making approvals only with the project participants and the owners of the enterprise.
Individual sources of investment
The owners of the company, as individuals, have the right to invest funds or tangible property in the development of their business. In this case, the financial risks are borne directly by the owners. Receiving dividends for this type of investment can be scheduled with a deferral for an indefinite period. It all depends on the payback period of the planned project.
When planning a large business project, investments can be attracted from several sources.
