Funding policy

What is a fund?
A fund is a financial grant which is given by someone for a specific purpose.

What are various forms of funds?

The various forms of funds are: 1. 2. 3. 4. 5. 6. Corporate funding Subsidies Taxes Grants Credit and Saving Donation

What does funding policy mean?

It refers to all the targets or objectives a person or an organization wants to fulfill by utilizing their available funds. For eg: If a company makes a profit of 100 crores in the first quarter of the financial year(Q1), and if its CEO plans on spending 55 crores on infrastructure development and 10 crores on buying up a small company, and the remaining amount as surplus amount for Q2, these plans constitute what is called as Funding policy.

What is the need for a funding policy?

Funding policy is very much required when funds are being disbursed by/to any party. (Party here refers to the persons or organizations that might benefit from funding). It defines the conditions according to which a fund is utilized. Without a proper funding policy, it is not possible for various financial institutions to exist.

What role does it play in the corporate world?

Companies and corporations, at the end of each financial quarter, prepare an estimate of their accounts and financial status- loss or profit. Then it is the funding policy that determines how much of money is allotted to which sector for development. It is usually the financial advisor and the management together that draw up the funding policy for an organization. Sometimes, in the case of a very large enterprise, the funding policy targets might be affected largely by its shareholders.

What benefit does it provide to the funder?

It may provide many types of benefits to the funder depending upon the type of funding.

Corporate funding benefits :

1. It helps in planning up the financial activities of the organization. 2. If a company is in loss, then with the help of funding from another company, it may e able to expand its network and thereby has a chance of regaining market and thus reducing losses. 3. It helps an organization to set goals for its next financial session.

Non-Profit funding benefits:

1. This type of funding includes taxes, educational funding and grants under various policies by the govt. 2. This is very much important to the development the country as taxes paid by the citizens are used by the govt. in non-profit funding like development of roads in rural areas etc. 3. This also provides a chance for small enterprises to come up as they can be funded by the govt under this funding. 4. This also includes funding of NGOs and orphanages. This not only helps the destitute but also it ensures sustainability of the organizations that work for these. Thus in the above few lines, weve seen the important role that funding policy plays in the financial and corporate world. With proper funding policies adopted by the govt. and corporate sector, the Developed Country tag isnt a footstep away from us.

When banks turn down business owners, they need to look for other methods of financing their companies. Finding funding for corporations can be just as difficult, which is one reason factoring has become a popular corporate funding financing method as well. You don't need to be told that having access to cash is vital to the triumph of all companies; without it, you won't be able to purchase supplies, pay employees or maintain day to day company expenses. Factoring is the business solution that you have been looking for.

Corporate funding and factoring

Small businesses and large corporations have several things in common, and one of these things is that they both require a steady cash flow in order to keep business running smoothly and growing more profitable each year. Without corporate funding, even the largest company wouldn't be able to pay its employees, order supplies or invest in future growth
A subsidy (also known as a subvention) is a form of financial assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry (e.g., as a result of continuous unprofitable operations) or an increase in the prices of its products or simply to encourage it to hire more labor (as in the case of a wage subsidy). Examples are subsidies to encourage the sale of exports; subsidies on some foods to keep down the cost of living, especially in urban areas; and subsidies to encourage the expansion of farm production and achieve self-reliance in food production. To tax (from the Latin taxo; "I estimate") is to impose a financial charge or other levy upon a taxpayer(an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law. Grants are funds disbursed by one party (Grant Makers), often a Government Department, Corporation, Foundation or Trust, to a recipient, often (but not always) a nonprofit entity, educational institution, business or an individual. A donation is a gift given by physical or legal persons, typically for charitable purposes and/or to benefit a cause. A donation may take various forms, including cash, services, new or used goods including clothing, toys, food, and vehicles. It also may consist of emergency, relief orhumanitarian aid items, development aid support, and can also relate to medical care needs as i.e.blood or organs for transplant.