Equipment Financing Companies In Canada . Asset Leasing Works When You ‘re Plugged In To The Right I

Asset Leasing In Canada. Equipment Finance Companies in have, for whatever reason some myths and plain old bad information associated with who they are, what they do, and what benefits the Canadian business owner and financial manager derive from the use of equipt. financing. Let’s dig in.

Myth # 1 – Everyone’s doing it! Actually that one is close to 80% correct because experts tell us that over 80% of businesses in North America (hey that’s us also!) utilize business leasing to achieve asset acquisition. We can’t speak for the other 20% – hopefully they are your mis-informed competitors.

Myth # 2 – A lease is kind of like a loan right? Not really, although bridge loans, term loans, conditional sales agreements, etc are asset finance transactions a lease is not a loan. Accounting, tax and other issues make lease finance a uniquely special proposition when you’re acquiring assets.

Myth # 3 – Only certain assets can be financed. That’s definitely not the case, as almost any asset, tangible or intangible (software is a good example) can be financed. The flexibility and creativity that goes into non standard asset financing is significant.

Myth # 4- There is only one type of business lease. That one is definitely not true, as in Canada the business owner/financial manager has the option to utilize a ‘ capital’ lease to own strategy, or alternately, an ‘operating ‘ lease to use finance choice. It really depends on the type of asset you are financing, its long term use to your firm, and its value. Oh and by the way, within those two basic lease option structures your company has the ability to structure payments that make the transaction more beneficial to your firm.

Myth # 5 – A lease company is a lease company, right. Not so fast! There are all types of lease companies in Canada – while they are segregated generally into small, medium and large ticket lessors they in fact range in size and geographical focus. The industry is made up of independent commercial lease companies, bank entities, and insurance companies. And ownership can be Canadian or U.S. based. Just knowing what leasing company to deal with for the assets your are financing is worth its weight in gold when you factor in time spent, interest rates, structures offered, and credit approval criteria .

Myth # 6 – The main benefit to asset financing via a lease is the 100% financing and fixed monthly payment. While that is of course true, there are numerous other benefits to asset financing under a lease structure – they include hedges against asset obsolescence, the ability to upgrade assets, tax and accounting benefits, cash flow management, etc .

Myth # 7- There are no risks in leasing. We wish we could say that is true, but in reality any aspect of business always has risk and some of the potential risks in lease finance include loss of asset values, repossession for non payment /default , risk of asset loss, insurance obligations,etc. The good news is that a properly structured lease, with the right partner firm or advisor can mitigate significantly, or entirely all those risks.

There you have it. Our debunking is complete. Seek out and speak to trusted, credible and experienced Canadian business financing advisor who assist you in setting the record straight on equipment finance companies and asset leasing in Canada.

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Indian Real Estate On Its Peak To Offer Profitable Investment

It was 2005 when people thought twice to buy the commercial or residential property in India due to the high prices at constant rate. However this is not the scenario today, in 2010 has witnessed a gradual fall in the rates of the India properties. In spite of the fall in the indian property rates the real estate agents, property dealers, real estate consultants and other property investors still shows an equal demand to buy the property in India as it becomes the right time to invest wit an India property. India with 27 states and 7 union territories comprises all types of properties including shopping malls, showrooms, entertainment zones, commercial complexes, housing societies, apartments and many more. Different cities of india are known by their own unique infrastructure and architecture trends. Mumbai, Delhi, Hyderabad, Pune, Chennai, Noida, Gurgaon, Chandigarh, Thane, Nagpur, Bangalore, Lucknow, Faridabad, Ghaziabad are some of the favorable destinations for accommodating world class infrastructure to their resident. All these states and cities of India are well known their prime location for doing business and investment purposes.

From previous few decades the rates and prices of Indian properties have been rising at constant rate. It makes the home loans providers on the top of the list where they can offer wide verities of home loans schemes and programs to the society. To buy the property in India one needs enough budgets with high amount of investment and commitment towards the property however for rental property in India it would not require so. Buying dream home in india means you must have knowledge about real estate glory in order to sign fair dealing. Real estate glory includes agreement letter, acceptance letter, allotment letter, approved plans, fixed rate of interest, sale deed, EMI and many more. Here in India you will number of home finance companies that offer detail information about how you can apply for the required home loan. Like ICIC, IDBI, AXIS, SBI, HDFC, PNB, LIC and many more are there well known for their quality and home door services.

Apart from home loans providers, here you will also find huge number of property dealers scattered in different cities and states of the nation providing all types of reliable and useful information to their interested clients. All these prove to be worth out while buying or selling property in India. There are many regions in India that have got an unexpected development in their infrastructure in previous few years attracts property dealers and other real estate agents to get investment with those regions of india. Hence, it is advisable to all people to concern with property dealer or real estate agents before entering into any property deal. Best and reliable property dealers are available in India for anyone interested to buy or sell properties in India. Apart from these, 123realesates bring you will all types of detail information about real estate in India including interior designers, architectures, buying first home, residential and commercial properties in india home finance companies and lots more. Therefore, be a part of an emerging sector for investment and business purposes.

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Compare Interest Rates While Shopping And Save Money On Your Car

Now that you are out to get yourself car, but how to finance a car if you have bad credit? This is the very first question that comes in the mind of a borrower who wants to buy a brand new car, or SUV, or Luxury car. It is also very significant to note here that while you can easily catch hold of a finance company if you are having a good credit history and a good credit score, however, on the contrary side of it, you’d have to face many hassles for getting a car loan if your credit history is not good or updated. It’d also becomes a little difficult for you to catch hold of a finance company to finance you a car at low interest rates if your FICO score is below 640 mark.

In a gist, car loan companies will provide you loan facility after categorizing you on the basis of your credit history, Most of the times, a borrower with poor credit record might even be declined an auto loan. The question of finding and not finding an auto finance company doesn’t arise as usually the borrower is at the receiving end, and the lender is at giving end. Therefore, in overall scenario, it is the financial condition of the borrower which will ultimately decide how easy or difficult getting an auto loan financed.

Now that you are ready to begin for car loan of your choice from the online car finance company, however you need to make it sure that the car loan company that offer you financing has a clear idea about your credit history situation. Besides that, you also need to check out about the interest rates that you are likely to pay on the car that you finance. Once it is done, you are in a comfortable situation and be a proud car winner.

Today there exist plenty of auto car finance companies and dealers out there on Internet that are ready to offer auto finance so that you have a car in your possessions. But, you need to search the best auto finance company or dealer that offers you low interest car finance rates, even if you have bad credit history. It is quite difficult to arrange for low interest rates if you are having the bad credit history, but certainly, it is not impossible. Compare and shop on Internet and you will come across the auto loan dealers that will understand your situation and offer you auto loan on flexible interest rates.

Before you begin searching online for any automobile financing, there are some a couple things to consider about it that will make you help processing application faster. One can either finance a car through any financial institution or can directly walk in any dealership show-room. But acquiring best car finance deals you need to involve doing an online research from a particular website that bring together car loan options from multiple lenders, but provides major types of auto financing services at very affordable interest rates without need to walk-in each car dealership to get a lowest interest rates. With large network of lenders connected with it would be easy to find out the best providers who are willing to provide loans for car at reasonable interest rates.

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Work With Equipment Leasing Finance Companies For Industrial Equipment And Computer Financing Needs

The decisions need to be made – namely should you lease or buy your new industrial , business equpment or computing technology . And are equipment leasing finance companies your best solution for your business financing needs .

Sooner or later all companies in Canada need to choose between leasing equipment , understand the benefits of that finance decision, and most importantly know who to turn to or partner with for their leasing acqusition financing needs .

Lets make sure you understand why you should carefully consider the key benefits of lease financing and ensuring you have made the best equipment acqusition decision . While it’s a U.S. statistic, we’re pretty sure that its the same here in Canada – namely that sooner or later over 80% of all business chooses lease financing as a business option for acquistion needs .

That eight out of ten ratio is a powerful one, so why in fact did those firms choose this method of business financing . The answer is actually quire easy, Benfits! Let’s examing he key benefits you should focus on , and, as importantly, ensure you understand the costs, any risk, and the processes involved in making a solid leasing decision . It’s all about doing your homework, being prepared, and working with the right parties .

So lets first recap those benefits . The bottom line is flexibility, and with this type of financing what else could be more suitable . Simply becasue whether you are a start up, or Canada’s largest corporation, whether you are leasing a photocopier, shop floor equipment, or computing technology .. you guessed it, equipment leasing finance companies do that .. for your firm !

Worried about your equipment or assets becoming obsolete – ( think computers !) . Dont worry, simply match your lease to the term of the expected useful life of your computers, telecom eqipment, software , etc . Worried about being burdened with asset disposition at the end of the lease term . Don’t be . Simply enter into an operating lease that allows you full control in returning, keeping,or even upgrading that asset .

It of course always come back to cash flow , and we can assure you that its easier to make a 3k monthly payment than to write a cheque out of your operating line of credit for 100k . Whether is computers, industrial business equipment, or your corporate jet its always about cash flow and working capital conservation in business . Having just come through the 2008-2009 recession cash flow and its conservation still remains king.

There are many slick tools to determine whether you should lease or buy assets – they are available everywhere . We always encourage clients to make an informred lease versus buy decision for their asset financing needs . And , getting back to those benefits , numerous accounting and tax implications also play favoruably to the leasing decision .

Are there any disadvantages to lease financing? We dont really call them disadvantages, but there is no perfect holy grail for business financing, and when you lease you should understand of course the agreement is non cancellable, might have miscelaneous admin fees attached to the transaction, and on occasion a down payment or first and last months payment might be required for credit reasons .

So, whats next then? If you want to meet your equipment leasing finace needs seek comapanies that are your best partner for asset size, your firms credit quality, and suited to your geographical needs . Don’t have a lot of time to investigage the process? Simply speak to a truted, credible and experience Canadain business financing advisor who will work throught the process with you, successfully .

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Can A Financing Receivables Strategy Save Your Company ! A Perfect Solution Via Business Finance Co

Survival. Growth. Are they different concepts? Business financing in Canada addresses of course both those basics. And one type of financing, the financing receivables offered by business finance companies seems to address both those issues very well thank you, in the SME sector. Let’s examine how that works, what are some of the key benefits, and if in fact one optimal solution exists with this type of financing.

Clients we talk to are often frustrated in their attempts to achieve cash flow and working capital financing in an efficient, simple matter. They are looking for both flexibility, and speed in closing a solution – unfortunately they don’t always find it.

Receivables financing fits somewhat perfectly into solving the desires of Canadian business owners and financial managers. However the array of types of business finance companies that offer that solution, and how that solution is delivered can sometimes be confusing to clients.

So, the basics… a receivable finance (aka invoice discounting/factoring) facility is the sale, on a one of, or ongoing basis of your billed receivables. That sale allows you to receive cash, in advance of course, of the collection of that receivable. We’ve been watching the age of Canadian business receivables get older and older of the years and while the norm ‘ in the old days’ used to be 30 the new norm is of 60-90 days… unfortuantely!

Clients are always asking when the correct time to consider such a facility is. Some key factors that will help them achieve both survival and growth are as follows – double digit growth in sales, requests from customers for extended terms, pressure from suppliers for accelerated payments from your firm, etc. Any or all of those points can come together in a final decision to include a receivables financing strategy into your survival equation.

So if in fact you made that decision can you expect to receive benefits that are tangible and offset the cost of this financing, which is very typically higher than bank finance rates? The answer is ‘ yes ‘!

Key benefits include the ability to achieve higher revenues due to the working capital infusion you have just arranged. Your cash flow now becomes very predictable given that you receive funds as you generate sales – a lot of the seasonality and bulges around your business ups and downs disappears. And, contrary to what some clients believe, you’re not borrowing funds and incurring debt, you are simply monetizing the left side of your balance sheet. Your A/R account simple reads ‘ cash on hand’! and that’s a good thing.

So what about the cost of this financing? In Canada it’s typically between 2-3% per month. That cost can be offset in a number of manners. The challenge we see clients face is in the way in which financing receivables in Canada is in fact presented by business finance companies. Rarely is the fee represented in a one time clear explanation – its masked with various miscellaneous issues.

Is there one type of facility that we recommend as optimal to clients? There is. It’s a confidential working capital/factoring financing that allows you to bill and collect your own receivables. You maintain the benefits of this type of financing, while being in control of your own destiny, and that growth and survival we spoke of!

Speak to a trusted, credible and experienced Canadian business financing advisor who can help you steer your way through the myriad of offerings in the Canadian business space.

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Make Your Dreams True With Online Car Finance Companies

Normally when you wish to buy a car or any other vehicle, all you choose to approach is a car loan lender for guaranteed auto loans approval. But look a bit further and you will find that this is not the only option you are limited to. Auto loan rates are likely to be available reasonably well with Car finance companies too. Usually banks give guaranteed auto loans to customers who have a present account or a registered lender who can help with the proceedings.

Besides, a lot many considerations like your credit scores, past bankruptcy history, etc come into picture while deciding upon auto loan rates. No doubt you are blessed with options like no credit check car loans but then obtaining them is no more a blessing with the global economical downturn. In the state of such affairs you would definitely be on a look out for cheap car lending options. And that is where car finance companies play their role. The car finance companies simply provide the income for you to get a car and the lender will transfer the amount of money into your standard bank and just reimburse them each month.

Now if you approach a bank for guaranteed auto loans, they are able to check the vehicle is HPI apparent; the car isn’t over priced plus good condition. Next some official from that bank would accept to fund for you and then you can choose to buy the car you wish to buy. Every bank has links with various automobile dealers and a variety of auto loan rates too. So based on the dealer you choose, the bank will transfer money in the account of the automobile dealer.

On the other hand if you approach a motor finance company for auto loan rates, the official would verify the borrower’s credit profile with which he can get an idea of how much to will the debtor would be paying on a monthly basis. Auto loan rate of Interest is mainly dictated by the credit profile. Furthermore, the monthly payments are determined based on the monthly income of the debtor and the repayment term he chooses. So there is no much of difference between the two however, auto finance specialists believe that financing a car though a company car finance is much cheaper in terms of auto loan rates than what it is to finance one with the bank.

In all now when you are well aware of both the forms of sources from which you can avail guaranteed auto loans, you might choose the right option available to you. It is indeed important to note that whichever option you choose for getting guaranteed auto loans, make sure of the genuineness of the car dealer. Moreover, it is indeed important that you verify what schemes the loan lender or the car finance company is providing you with; because if you are a first time buyer looking for a no credit check car loan or are a student who does not have sufficient credit or no credit at all, you can get yourself the associated advantages. Hence, shop around, enquire, analyze and get the best auto loan rates with a guaranteed auto loan. Get best car finance deals through that specialize financing for new and used car loans for people with all credit types, no matter if you have file bankruptcy in past.

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How to Choose a Car Finance Broker – Some Useful Tips

Financing a car is a very important process and today with the availability of numerous car finance brokers it has become an easy option to get secure car loans. Today these car finance brokers are also playing a vital role in assisting car buyers. In fact, consulting and taking help of car broker can definitely be most appropriate option if you don’t have any clue about what to look at according to your budget. A finance broker is the most experienced personnel and clued-up on how to approach the financiers in a way that can persuade them to approve the loan. They usually have good relations and reputation with the lenders as being reliable, and so they know which lenders are likely to be open to a client.

In general, they act as the key source and offer services such as finding a used or brand new car model that the customer wants and within a budget range. At times, these car brokers even assist car buyers in negotiating with a used car seller. However, these days there are many car finance services and making a proper selection is turning out to be a very complicated process. You need to understand that not all car finance services are fair. Therefore, if you are looking to finance a car or choose a car financing service then here are a few important points that you should keep in mind while making a selection:


You must confirm whether your car finance consultant or broker is a member of FBAA or COSL or both of these industry associations. While Finance Brokers’ Association of Australia Ltd. (FBAA) is one of Australia’s leading membership bodies for finance broking professionals, the Credit Ombudsman Service Limited (COSL) is an independent organisation that is mainly indulged in handling complaints about finance brokers. You can easily confirm finance consultant’s membership by searching through their member list. Adding to this, WA Finance Broker License is yet another additional requirement for finance brokers serving in Western Australia. Nevertheless, if you are looking for finance broker and residing in the state of WA or other states of Australia, it is essential that the broker must hold a WA Finance Broker License. A broker holding WA Finance Broker License entails passing a comprehensive range of checks, educational requirements and operational requirements.


While selecting a car finance broker also ensure you know about their range of lender accreditations. The range of accreditations held by a broker governs the range of options they can offer. You must note that a broker’s accreditation can not just change the range of finance options available to you, but it may even affect the quality of those options.

Experienced Staff

You must choose car finance service that recruits and retains professional and knowledgeable staff. The broker must be an experienced professional who can demonstrate and explain about why a particular product is highly recommended or even suites your specific circumstance. If possible make sure you even ask for testimonials from previous clients that in turn may help you in the confirmation of their experience.

Services Offered

As mentioned earlier, today there are many finance services available in the market. Therefore, you must find out more about any extra service that a broker can provide. You should expect your finance consultant to supply detailed information about timeframes, and any fees or extra charges related with your finance. The key point is if a broker is being able to clarify the comparison rate of your recommended vehicle finance and the overall cost of your finance package then it is quality sign of a good finance broker.

These are some important points that can help you in choosing your car finance services easily. Today a lot of responsibility goes along with buying a car and taking financial help through car broker. Just taking care of few essential steps can help you select your car broker and further purchase a nice new or used car.

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Car Finance Places You On The Top Gear While Buying A Car

Fast car on open roads. It is a perfect picture for any car enthusiast. But you have to go to your work and also drop your kids to school. This is the real picture for most of us. We need to save time when we don’t have any. A typical individual has so many odd jobs to complete that a car can, without doubt, facilitate their accomplishment. Financing your car doesn’t fit your idea of the way of buying your car; then probably you are still stuck with traditional car buying methods. Shed your inhibitions with regard for car financing because it undoubtedly keeps in mind your financial caliber before furnishing you with a car finance loan.

Car financing has taken a new spin with regard to providing investment for buying a car. So, how do you finance a car? If this question leaves you baffled, then you have to go a long way in the process of buying a car. The term ‘financing’ in relation to buying a car connotes either rendering loan to buy the car or lease the car to you. You are probably concentrating on the former meaning. Many people are in favour of talking car finance from dealership for it seems like a convenient option. It seems easy; you select a car, fill out a credit application, and drive away with your car – all in a day’s work. Car finance through dealership will give you car finance on weekends and even at nights when other banks and credit unions are closed.

Seems convenient, isn’t it? But there is a catch. The dealer will be certainly charging you more for your car finance. Usually car buyers are overcharged by 3% on their car finance. A great number of complaints about car financing are related to dealers. 0% APR is not only attractive but lures the buyers to acquire up car finance not meditating if it is feasible for them. There are very few people who can actually get a 0% APR. Thus car finance deals usually fall midway thereby making car finance experience an extremely distressing one. You are buying a new car and probably for the first time, you certainly want it to compliment your enthusiasm. There are few elementary things that need to be kept in mind before taking that crucial primeval step in car buying.

First and foremost in car buying and financing is checking your credit score before you apply for a car loan. Many people are unaware of the fact that they even have a credit score. You can expediently check your credit score online. So, if you have bad credit history then probably you will be paying more interest rate for your car finance. If your credit score drops below 550, then probably apply for new car finance is not such a good idea. First repair you credit score. Repairing credit score requires little effort, helps you repay your debt and retain your credit report. Online car finance companies can get you car finance loan even if your credit score is lower than required. Your car finance loan can get approved in minutes. Online car finance companies have revolutionized car finance procedure. With lowest online car finance rates, no application fees, or down payments car finance companies provide a formidable competition to car dealers. Car finance companies have set a standard for providing car finance that is worth opting for.

70% of cars are obtained by some kind of financing. You can even finance a used car. The process is as effortless and undemanding as financing a new car. The essence to finding the right car finance is doing to research about your kind of car. Knowledge is power; you must be awake to this age old logic. When so much information frequently exists, then why not make use of it. Find out how much your car costs by comparing rates with local dealers. Very decisive, is cognizing how much, you can afford. Calculate, you monthly income and deduct your usual monthly expenditure to find out how much you can afford on a monthly basis. Compute carefully, otherwise you will find difficulty in repaying your car finance loan. And you definitely don’t want to fool around with your repayment plan because a lot is at stake. You can seek free advice for your own car finance online through credit unions and loan institutions.

You are a car enthusiast, a car consumer, a just a person who needs a car you ought to drive the best car. And why not drive the best car, when you have access to the best car finance plans. Car financing is a transparent route that leads you to become a car owner. Car finance loans are usually short term loans ranging from 36 to 72 months. Shorter loan term imply, lower interest rates and will prove to be cheaper. You have been working hard to select the car you want; there is a fairly good chance that you would not have to work so hard for car finance. So, sit back relax and enjoy the ride.

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Finance, Credit, Investments – Economical Categories

Scientific works in the theories of finances and credit, according to the specification of the research object, are characterized to be many-sided and many-leveled.

The definition of totality of the economical relations formed in the process of formation, distribution and usage of finances, as money sources is widely spread. For example, in “the general theory of finances” there are two definitions of finances:

1) “…Finances reflect economical relations, formation of the funds of money sources, in the process of distribution and redistribution of national receipts according to the distribution and usage”. This definition is given relatively to the conditions of Capitalism, when cash-commodity relations gain universal character;

2) “Finances represent the formation of centralized ad decentralized money sources, economical relations relatively with the distribution and usage, which serve for fulfillment of the state functions and obligations and also provision of the conditions of the widened further production”. This definition is brought without showing the environment of its action. We share partly such explanation of finances and think expedient to make some specification.

First, finances overcome the bounds of distribution and redistribution service of the national income, though it is a basic foundation of finances. Also, formation and usage of the depreciation fund which is the part of financial domain, belongs not to the distribution and redistribution of the national income (of newly formed value during a year), but to the distribution of already developed value.

This latest first appears to be a part of value of main industrial funds, later it is moved to the cost price of a ready product (that is to the value too) and after its realization, and it is set the depression fund. Its source is taken into account before hand as a depression kind in the consistence of the ready products cost price.

Second, main goal of finances is much wider then “fulfillment of the state functions and obligations and provision of conditions for the widened further production”. Finances exist on the state level and also on the manufactures and branches’ level too, and in such conditions, when the most part of the manufactures are not state.

V. M. Rodionova has a different position about this subject: “real formation of the financial resources begins on the stage of distribution, when the value is realized and concrete economical forms of the realized value are separated from the consistence of the profit”. V. M. Rodionova makes an accent of finances, as distributing relations, when D. S. Moliakov underlines industrial foundation of finances. Though both of them give quite substantiate discussion of finances, as a system of formation, distribution and usage of the funds of money sources, that comes out of the following definition of the finances: “financial cash relations, which forms in the process of distribution and redistribution of the partial value of the national wealth and total social product, is related with the subjects of the economy and formation and usage of the state cash incomes and savings in the widened further production, in the material stimulation of the workers for satisfaction of the society social and other requests”.

In the manuals of the political economy we meet with the following definitions of finances:
“Finances of the socialistic state represent economical (cash) relations, with the help of which, in the way of planned distribution of the incomes and savings the funds of money sources of the state and socialistic manufactures are formed for guaranteeing the growth of the production, rising the material and cultural level of the people and for satisfying other general society requests”.
“The system of creation and usage of necessary funds of cash resources for guarantying socialistic widened further production represent exactly the finances of the socialistic society. And the totality of economical relations arisen between state, manufactures and organizations, branches, regions and separate citizen according to the movement of cash funds make financial relations”.
As we’ve seen, definitions of finances made by financiers and political economists do not differ greatly.
In every discussed position there are:

1) expression of essence and phenomenon in the definition of finances;

2) the definition of finances, as the system of the creation and usage of funds of cash sources on the level of phenomenon.

3) Distribution of finances as social product and the value of national income, definition of the distributions planned character, main goals of the economy and economical relations, for servicing of which it is used.

If refuse the preposition “socialistic” in the definition of finances, we may say, that it still keeps actuality. We meet with such traditional definitions of finances, without an adjective “socialistic”, in the modern economical literature. We may give such an elucidation: “finances represent cash resources of production and usage, also cash relations appeared in the process of distributing values of formed economical product and national wealth for formation and further production of the cash incomes and savings of the economical subjects and state, rewarding of the workers and satisfaction of the social requests”. in this elucidation of finances like D. S. Moliakov and V. M. Rodionov’s definitions, following the traditional inheritance, we meet with the widening of the financial foundation. They concern “distribution and redistribution of the value of created economical product, also the partial distribution of the value of national wealth”. This latest is very actual, relatively to the process of privatization and the transition to privacy and is periodically used in practice in different countries, for example, Great Britain and France.

“Finances – are cash sources, financial resources, their creation and movement, distribution and redistribution, usage, also economical relations, which are conditioned by intercalculations between the economical subjects, movement of cash sources, money circulation and usage”.
“Finances are the system of economical relations, which are connected with firm creation, distribution and usage of financial resources”.

We meet with absolutely innovational definitions of finances in Z. Body and R. Merton’s basis manuals. “Finance – it is the science about how the people lead spending `the deficit cash resources and incomes in the definite period of time. The financial decisions are characterized by the expenses and incomes which are 1) separated in time, and 2) as a rule, it is impossible to take them into account beforehand neither by those who get decisions nor any other person” . “Financial theory consists of numbers of the conceptions… which learns systematically the subjects of distribution of the cash resources relatively to the time factor; it also considers quantitative models, with the help of which the estimation, putting into practice and realization of the alternative variants of every financial decisions take place” .

These basic conceptions and quantitative models are used at every level of getting financial decisions, but in the latest definition of finances, we meet with the following doctrine of the financial foundation: main function of the finances is in the satisfaction of the people’s requests; the subjects of economical activities of any kind (firms, also state organs of every level) are directed towards fulfilling this basic function.

For the goals of our monograph, it is important to compare well-known definitions about finances, credit and investment, to decide how and how much it is possible to integrate the finances, investments and credit into the one total part.

Some researcher thing that credit is the consisting part of finances, if it is discussed from the position of essence and category. The other, more numerous group proves, that an economical category of credit exists parallel to the economical category of finances, by which it underlines impossibility of the credit’s existence in the consistence of finances.

N. K. Kuchukova underlined the independence of the category of credit and notes that it is only its “characteristic feature the turned movement of the value, which is not related with transmission of the loan opportunities together with the owners’ rights”.

N. D. Barkovski replies that functioning of money created an economical basis for apportioning finances and credit as an independent category and gave rise to the credit and financial relations. He noticed the Gnoseological roots of science in money and credit, as the science about finances has business with the research of such economical relations, which lean upon cash flow and credit.
Let’s discuss the most spread definitions of credit. in the modern publications credit appeared to be “luckier”, then finances. For example, we meet with the following definition of credit in the finance-economical dictionary: “credit is the loan in the form of cash and commodity with the conditions of returning, usually, by paying percent. Credit represents a form of movement of the loan capital and expresses economical relations between the creditor and borrower”.

This is the traditional definition of credit. In the earlier dictionary of the economy we read: “credit is the system of economical relations, which is formed while the transmission of cash and material means into the temporal usage, as a rule under the conditions of returning and paying percent”.
In the manual of the political economy published under reduction of V. A. Medvedev the following definition is given: “credit, as an economical category, expresses the created relations between the society, labour collective and workers during formation and usage of the loan funds, under the terms of paying present and returning, during transmission of sources for the temporal usage and accumulation”.

Credit is discussed in the following way in the earlier education-methodological manuals of political economy: “credit is the system of money relations, which is created in the process of using and mobilization of temporarily free cash means of the state budget, unions, manufactures, organizations and population. Credit has an objective character. It is used for providing widened further production of the state and other needs. Credit differs from finances by the returning character, while financing of manufactures and organizations by the state is fulfilled without this condition”.

We meet with the following definition if “the course of economy”: “credit is an economical category, which represents relations, while the separate industrial organizations or persons transmit money means to each-other for temporal usage under the conditions of returning. Creation of credit is conditioned by a historical process of fulfilling the economical and money relations, the form of which is the money relation”.

Following scientists give slightly different definitions of credit:
“Credit – is a loan in the form of money or commodity, which is given to the borrower by a creditor under the conditions of returning and paying the percentage rate by the borrower”.
Credit is giving the temporally free money sources or commodity as a debt for the defined terms by the price of fixed percentage. Thus, a credit is the loan in the form of money or commodity. In the process of this loan’s movement, a definite relations are formed between a creditor (the loan is given by a juridical of physical person, who gives certain cash as a debt) and the debtor.
Combining every definition named above, we come to an idea, that credit is giving money capital of commodity as a debt, for certain terms and material provision under the price of firm percentage rate. It expresses definite economical relations between the participants of the process of capital formation. Necessity of the credit relations is conditioned, from one side, by gathering solid quantity of temporarily free money sources, and from the second side, existence of requests of them.

Though, at the same time we must distinguish two resembling concepts: loan and credit. Loan is characterized by:

o Here, the discussion may touch upon transmission of money and also things form one side (loaner) to another (borrower): a)under the owning of the borrower and, at the same time, b) under the conditions of returning same amount or same quantity and quality of the things;

o The loaning of money may bear no interest;

o Any person may take part in it.
With the difference with loan, credit, which is somehow a private occasion of the loan, represents:

o One side (loaner) gives to the second one (borrower) only money, and _ for temporal usage;

o It may not bear no interest (if the assignment doesn’t foresee something);

o In it creditor is not any person, but a credit organization (at the first place, banks).
So, a credit is the bank credit. To our mind, it is not correct to use “credit” and “loan” as the synonyms.
Banking crediting is the union of relations between bank (as a creditor) and its borrower. These relations touch upon:

a) Giving a certain amount of money to the borrower for definite purpose (though, we meet with the so-called free credits, aims and objects of crediting are not appointed in the assignment);

b) Its opportune returning;

c) Getting percentage rate from the borrower for using the sources under his/her disposal.
The essential foundation of the credit essence and its important element is existence of trust between the two sides (in Latin “credo”, from which comes the word “credit”, means “trust”).
From the position of circulation of money forms (in the abstraction, historical process of formation economical relations and social budget and banking systems expressed by them) comparing different definitions of finances and credit, the paradox conclusion appears: credit is the private occasion of finances. And truly, from the position of movement of the money forms, finances represent the process of formation and usage of the funds of cash means. Very often such movements are fulfilled without returning, but sometimes, it is possible to give loans from the budget for the investment projects of other needs. Also, when a manufacture or corporations use their cash funds and we mean the finances of industrial subject, such usage may be realized as inside the manufacture or corporation (there is no subject about returning or not returning of the usage), so gratis under conditions of returning. This latest is called commercial form because of transmitting the sources to others, but even in this occasion, it is the element of financial system of the manufacture and corporation.

From the point of cash means movement, main character of credit is the process of formation and usage of the funds of cash means under the conditions of returning and, as a rule, taking the value-percentage. If gating the credit value doesn’t take place (even in the exceptional occasions), according to the movement form, credit becomes a private occasion of finances, as from the net financial funds (consequently from the state budget) the loans which bear no interests may be used. If gating credit value takes place, by the appearance form, credit is discussed to be financial modification.

From the historical point of view, finances (especially in the sort of the state budget) and credit (beginning with usury, later commercial and banking) were developing differently for considering credit to be the part of finances. Though, from the genetic-historical point of view, previous loaners, before giving loan, needed gathering the permanent capital not returning, that is the net financial foundation. The banks analogously needed concentration of the important own capital for influxing the consumers’ means and for getting higher percentage rate under the conditions of returning. Herewith, exactly on the financial basis, in the sort of financial fund (which later partially becomes loan fund) part of the bank capital appears to be the reservation (insurance) part of the fund, which by nature is financial and not loan. So notwithstanding the essential distinctions between finances and credit form the genetic-historical point of view, credit appears to be formed from finances and represent their modification.

From the essential position of expressing economical relations of finances and credit, we meet with cardinal distinctions between these two categories. Which mostly expressed by the distinction of the movement forms notwithstanding they are returnable or not. Finances express relations in the aspects of distribution and redistribution of social product and part of the national wealth. Credit expresses distribution of the appropriate value only in the section of percentage given for loan, while according to the loan itself, a only a temporal distribution of money sources takes place.
Herewith, there is a lot of common between the finances and credit as from the essential point of view, so according to the form of movement. At the same time, there is a significant distinction between finances and credit as in the essence, so in the form too. According to this, there must be a kind of generally economical category, which will consider finances and credit as a total unity, and in the bounds of this category itself, the separation of the specific essence of the finances and credit would take place.

Funding of the cash means is common to the researched economical categories. It takes place in any separate system of finances and credit, which have been touched upon during the analyses of defining finances and credit. Word combination “funding of the cash sources (fund formation)” reflects and defines exactly essence and form of economical category of more general character, those of finances and credit categories. Though in the in economical texts and practice, it is very uncomfortable to use a termini, which consists of three words. Also, “unloading” with an information hardens greatly its influxing into the circulation even in the conditions of its strict substantiation and thoroughness.
In the discussing context we consider:

1) wide and narrow understanding of economical category of the finances;

2) discussing finances in narrow understanding under general traditional meaning;

3) discussing finances, as funding of the cash means, in wide understanding, which concerns finances – in narrow meaning and credit – in complete meaning.
Termini “funding” and its equivalent “fund formation” are used by us as the purposeful structuring of cash means, which is based on two poles – accumulation of money sources (gathering) and its usage for definite purpose in the way of financing and crediting.
We have established a new termini – “finance-investment sphere” (FIS). Analyses about interrelation of finances and credit made by us give us an opportunity of proving, that in the given termini, the word “financial” is used with the meaning of funding cash sources, its purposeful structuring. In this process we consider at the same time financial, credit and investments’ economical categories.

Let’s sum up middle results of discussing new concept – “finance-investment sphere” and discuss its investment consisting parts.

The concept “investments” was brought into the native economical science from the West. In the Soviet economical science they for a long time used in the place “investments” the termini “capital placement”, which expressed the usage of the industrial factors in the sphere of real industrial activities during realization of capital projects. From one glance, this termini in its concept is identical to the “investments”, consequently it is possible to use them as synonyms. Though the termini “investments” and “investing” have the advantage towards the termini “capital placement” from linguistic and philological points of view, because they are expressed with one word. This is not only economical and comfortable in the process of working with the termini “investment” itself, but also it gives an opportunity of termini formation. More concretely: “investment process”, “investment domain”, “finance-investment sphere” – all these termini are much more acceptable.
Changing native economical termini with foreign ones is purposeful, if it really matters (by keeping parallel usage of the native termini for the inheritance). Though we must not change native economical termini into foreign ones all together, when by ordinal traditional language easy to explain private and narrow concrete processes and elements get their own termini. The “movement” of these termini is approved in the narrow professional bounds, but their “spitting out” into the economical science may turn economical language into the tangled slang.

Let’s discuss termini – “investment” and “capital placement’s” usage in the economical literature.
Investments are placement of funds into the main and circulation capital for the purpose of getting profit. “Investments in material assets – are the placements of funds into the mobile and real estate (land, buildings, furniture and so on). Investments in financial assets are the placements of funds into the securities bank accounts and other financial instruments”.

We don’t meet with the termini “investments” in the earlier economical dictionary, but we meet the combined termini “investment policy” – the union of the industrial decisions, which guarantee main directions of the capital investments, the activities of their concentration in the determinant suburbs, on which the reaching of planned rates of development of the society production is depended, balancing and effectiveness, getting more and more production and profit of the national income for every lost Ruble”. For today, in the most actual definitions, the capital investments are bounded only by financial means, when not only financial, but also the investment of natural, material-technical and informational resources takes place. Labour resources take an actual place in the investment process. They themselves fulfill this or that investment process.

A positive side of the discussed definitions is that they connect investment policy and capital placements (investments):

– economical development according to the key directions to the concentration;

– providing high rates of economical growth;

– raising an economical effectiveness, which is expressed:

a) by growing the throw off of the production and national income for every lost Ruble;

b) by fulfilling the branch structure of the investments;

c) by improving their technological structure;

d) by optimization of their further production structure.

Compared with such definition of the investments (capital placement) the definition of investments in the dictionary attaching the “Economics” seems to be unimproved: “investments – the expenses of gathering production and industrial means and increasing material reserve”. In this definition current expenses (production expenses) are mixed with the investment (capital) expense. Also, not the investment expenses but (though the investments are followed by the appropriate expenses) exactly advancing. It differs from the expenses by that the means (means) are put by returning the advanced values, also, under the conditions of growth, to which the concept-advanced capital is corresponding. the advancing may be realized in the money, natural-material and informational forms.

Except the termini “investments”, there are two more termini related with the investment. They are shown below.

“Human capital investment” – any activity provided for rising the workers labour productivity (in the way of growing their qualification and developing their abilities); at the expenses of improving the workers’ education, health and raising the mobility of the working forces”. It is very useful to use the mentioned termini, though it needs one correction: the human capital investments do not concern only workers, but also the servants, representatives of every kind of labour.
“Investment commodity, capital goods – a capital.”

In the official manuals of political economy of the reformation time the capital investments are discussed as “expenses for creating new main funds and widening, reconstruction and renewing the active ones”. In this definition the investments (capital placements) during separation of the forms (types) of further production of the main funds are bounded only by main funds (without increases of the circulation funds and insurance reserves):

a) creating new ones;

b) widening;

c) reconstruction;

d) renewing.

Also, the concept of the industrial gathering appears, at the expenses of widening of basic, circulation funds and also insurance reserves takes place”.

You’ll meet below the definitions of investments from “the course of economy”: the investments are called “placements of fund into the basic capital (basic means of production), reserves, also other economical objects and processes, which request long-termed influxing of material and cash means. “According to the division of capital into physical and money forms, the investments too must be divided into material and cash investments”.

They apportion investment commodity, to which belong industrial and nonindustrial building objects, vehicles purposed for changing or widened technical park and the furniture, increasing reserves and others.

“They call the total investments of production an investment product, which is directed towards keeping and increasing the basic capital (basic means) and reserve. Total investments consist of two parts. One of them is called the depreciation; it represents important investment resources for compensation of renewal till the level of before industrial usage, wearing out and repairing of the basic means. Second consisting part of the total investments is represented by net investments – capital investments for the purpose of increasing basic means”. Depreciation is not a compensation resource of wearing the basic funds out, but it is the purposeful financial source of such resources.
Human capital investment is “a specific kind of investments, mostly in education and health protection”.

“Real investments are the investments in the economical branches and also, they are kinds of economical activities, which provide influxing the increases of real capital, that is increasing material values of the industrial means”. We can agree with such definition with one specification that material and nonmaterial values too belong to the real capital (wealth), consequently science-researching experimental-construction results, various information, education of he workers and others. Such service as organization of the excitable games, also the service of redistribution social wealth from one private person to another (except charity).

“Financial investments represent placement of funds into the shares, obligations, promissory notes, other securities and instruments. Such investments, of course, do not give increases of the real material capital, but they help getting profit, consequently at the expenses of changing the course of the securities in the time of speculation, or distinguishing the course in different places of sell and purchasing”. We share wholly such definition, hence it follows that financial investments (if it is not followed by real investments as a result) do not increase real material wealth and real nonmaterial wealth. According to this context, the expression below is very important: “we must distinguish financial investments, which represent placement of the funds in the ways of selling and purchasing the securities for the purpose of getting profit and financial investments, which become cash and real, moved to real physical capital.”

In the “economical course” quoted before long and short-termed investments are separated. Recognizing the existence of the bounds between them, the authors ascribe short-termed investments to “one month or more” investments. If we get such conditioned criteria, that we can call the investments which overcome the terms of some months, long-termed ones, which is very doubtful and we don’t agree with it. A long-termed character of the fund placement is a significant feature of the investments (short-term doesn’t combine with the concept of investments). Principally, it would be better to point out quick compensative, middle termed compensative and long-termed compensative investments:

– less then 6 months – quick compensative;

– from 6 months up to the year and a half – middle termed compensative;

– more then the year and a half – long termed compensative.

We stopped at the definition of the investments in the capital work “economical course” for the special purpose, as, in it the author tried to discuss the concept of investments systemically and quite completely, herewith the book is published just now.

We’ll return to the discussion the definition economical category of “investments” in different publications in the following chapter. The definitions given here are quite enough for having a notion of the level of lighting up the given category in the economical literature.
What conclusions may be made according the definition of the mentioned economical category in the published works, except the made notions and specifications?

There is quite deeply, concretely and thoroughly defined the concept of “investments”, different definitions in the economical literature; but mostly in every works about the investments discussed by us until now, there is not opened the essence of investments as an economical category. In every monograph , even if it has a title investment, as an economical category , there is given only the definition, concept of investments. But, as the Academician Vasil Chantladze explains, “a concept is a discussion, which proves something about the distinguishing feature of the researched object. A concept out of much essential characteristic features represents only one, and essential in it is only – definition”.

But the categories are much wider; it is “a key, the most fundamental concept of every science”. Economical categories theoretically represent real, objectively existed productive relations. A category is the defining of occasions of existed characters, connections, relations of the objective world. Generally, any educational process is fulfilled by the categories, which give opportunities for dividing the processes and occasions semantically, for expressing the definitions of a subject and realize their specific peculiarities and economical relations of a material world.
Our goal is exactly to substantiate investments – as an economical category and also, as a financial category in the narrow understanding.

Here we apply for another manual thesis made by the academician Vasil Chantladze: “every financial relation is an economical one and every financial category is and economical one, but not every economical relation and economical category is financial relation and financial category”.
In the process of defining the investments, it is important to take in mind the sides of resources, expenses and incomes, because investment, from one side, is the result of the manufacture’s activity, and, from another one, – a part of income, which, in this case, is not used for usage.
Another occasion: it is advisable to discuss investments in two aspects: as a category of reserve and flow, which will reflect exactly the connection between “placement of funds” and “investments”.

As we’ve mentioned above, not long ago, in the well-known Soviet literature the concepts of “the placement of funds” and “investments” were accepted to be the synonyms and concerned to be investment of sources for further production of the main funds and formation of the turnover funds. We meet with such understanding of the concept of “investment” (here, they separate three types of the investment expenses: investments in the basic capital of investments, investments in the house building and investments in the reserves) in the modern economical publications and it is mostly used on the macro level during a statistical analyze of economical processes. In this concrete occasion investment is the category of reserve.

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