Funding is the process of supplying financial resources, usually in the form of money, effort, expertise or time, to finance a need, program, and project, usually by an organisation or company.
Sources of funding include credit, venture capital, donations, grants, savings, subsidies and taxes. Fundings such as donations, subsidies, and grants that have no direct requirement for return of investment are described as "soft funding" or "crowdfunding". Funding that facilitates the exchange of equity ownership in a company for capital investment via an online funding portal as per the Jumpstart Our Business Startups Act (US) is known as equity crowdfunding.
Funds can be allocated for either short-term or long-term purposes, often from financiers a group of people dedicated to this task.
In economics funds are inserted into the market as capital by lenders and taken as loans by borrowers. There are two ways in which the capital can end up at the borrower. The lender can lend the capital to a financial intermediary against interest. These financial intermediaries then reinvest the money against a higher rate. The use of financial intermediaries to finance operations is called indirect finance. A lender can also go the financial markets to directly lend to a borrower. This method is called direct finance.
It is used for research, in fields of technology or social science. Research funding can split into commercial and non-commercial. Research and development departments of a corporation normally provide commercial research funding. Whereas, non-commercial research funding is obtained from charities, research councils, or government agencies. Companies that require such funding normally have to go through competitive selections. Only those that have the most potential would be chosen. Funding is vital in ensuring the sustainability of certain projects.
There is a new method of finance called "Crowd Funding" in which many members of the public and invest modest sums of money in to new businesses, start-ups or even buy bonds in large established corporations.
Below are some well-known companies that provide quick access to funding capital :-
- ZOPA has been around since 2005 and was one of the first P2P lenders. They are primarily for individuals and are based in London
- Funding Circle allows the general public to supply quick funding to small businesses and get a decent return (Typically 7%). It was started in 2010.
- KickStarter is the world's largest funding platform for creative projects. A home for film, music, art, theatre, games, comics, design, photography, and more. it provides quick access to funding or grants.
- Accelerate Funding have been working in business finance for well over a decade, helping companies undertake R&D claims, discussing and planning Patent Box, assessing the possibilities of swifter access to grants, funding and signposting young businesses to SEIS and then EIS.
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