Introduction To Private Financing

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Introduction To Private Financing
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• What is private financing?To understand the
  definition of private financing it is pertinent
  to start by mentioning what finance in general
  is. In this sense, this subject is responsible
  for the correct administration of the private
  investment of an organization. Now, there are
  different types of deepening or finance depending
  on the area in which they are required. Given
  this, there are various specializations of
  finance such as personal, public, private,
  corporate, among others. However, although they
  all require different knowledge for their
  applications at the same time they are also
  complementary.The concept of private investment
  indicates that it is a discipline focused on the
  management of money and capital of people and/or
  private companies.

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• According to other authors, private investment
  can also be explained as the knowledge required
  to manage privately owned financial resources,
  that is, to manage the money and capital of
  companies and/or people that do not belong to the
  state. Additionally, the importance of private
  finance lies in the need to know how to
  effectively and efficiently manage the investment
  and/or financing needs of the members who belong
  to the private sector.To close with this
  introduction to private finance, it is necessary
  to point out in the same way, certain
  particularities on this matter. That is why,
  below, a list with the 4 main characteristics of
  private finance will be exposed

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•     The objective of private finance is profit,
  that is, to increase the wealth and economic
  value of investors or private companies.  
   Private finances are used to manage the
  financial resources of companies and private
  persons of a government.    They are based on
  maximizing income and profits as well as
  minimizing costs and expenses.    They do not
  seek comfort but rather the efficiency of
  financial resources to obtain the highest
  profitability.Differences between public
  finance and private financePrivate financing
  and public finance correspond to one of the most
  common ways of classifying this matter. Although
  all branches of finance are complementary, it
  could be classified that public finance and
  private finance have great differences between
  them that even make them seem like antonyms. It
  is for this reason, that below, we present a list
  of the main differences between public and
  private finance

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• The objective of public finance is the welfare of
  a state, while private finance has the purpose of
  seeking profit for organizations and private
  persons.Public finance has a macroeconomic
  impact, that is, it handles finance from a
  perspective that includes several factors such as
  all the people, goods, or companies in a country.
  Private finance has a micro economic impact, that
  is, it handles finance focused on an individual
  organization.In private finance, the
  maximization of profits is sought through the
  optimization of investments, expenses, and costs.
  Public finance cannot always minimize its
  expenses or costs because its intention is social
  welfare.

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• Private finance is based on the application of
  any necessary measure to maximize the
  profitability of a company or private person.
  Instead, public finance is based on the
  application of laws and regulations based on the
  public policies of a government.
• For private finance, it is easier to carry and
  present the results through the financial
  statements. In public finance it is much more
  complicated to issue financial reports due to its
  large volume.In summary, the applications and
  purposes of public and private financing are very
  different. The first of them, what they are
  looking for is the management of public financial
  resources to achieve social welfare. Instead, the
  second is dedicated to maximizing the wealth and
  profitability of organizations and private
  individuals.

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