DEFINITION of 'Financing'

The act of providing funds for business activities, making purchases or investing. Financial institutions and banks are in the business of financing as they provide capital to businesses, consumers and investors to help them achieve their goals.


There is a large variety of financing techniques that businesses and consumers can use to receive financing; these techniques range from IPOs to bank loans. The use of financing is vital in any economic system as it allows consumers to purchase products out of their immediate reach, like houses, and businesses to finance large investment projects.

  1. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  2. Equity Financing

    The act of raising money for company activities by selling common ...
  3. Inventory Financing

    A line of credit or short-term loan made to a company so it can ...
  4. Debt Financing

    When a firm raises money for working capital or capital expenditures ...
  5. Bridge Loan

    A short-term loan that is used until a person or company secures ...
  6. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
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  1. What are the sources of funding available for companies?

    Despite all the differences among companies, there are only a few sources of funds available to all firms. 1. They make ... Read Full Answer >>
  2. What is Fisher's separation theorem?

    Fisher's separation theorem stipulates that the goal of any firm is to increase its value to the fullest extent, regardless ... Read Full Answer >>
  3. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  4. What kind of assets can be traded on a secondary market?

    Virtually all types of financial assets and investing instruments are traded on secondary markets, including stocks, bonds, ... Read Full Answer >>
  5. Why would a company decide to utilize H-shares over A-shares in its IPO?

    A company would decide to utilize H shares over A shares in its initial public offering (IPO) if that company believes it ... Read Full Answer >>
  6. How do I place a buy limit order if I want to buy a stock during an initial public ...

    During an initial public offering, or IPO, a trader may place a buy limit order by choosing "Buy" and "Limit" in the order ... Read Full Answer >>

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