Auto Financing

Posted Saturday, February 12, 2022 ( 8 months ago)

Last updated: February 12th, 2022

What is Auto Financing:

Automated financing is the process of lending money to a company, obtaining goods or services, fulfilling obligations to organize operations or automated financial expenses.

Auto Financing is an important engine for the development of the economy, allowing manufacturing companies to carry out their activities, plan their future or gain access to vast resources.

The most common way to get money is to borrow or lend to banks. In any case, in the near future, it will be repayable, in full or in installments, with no interest.

See also

  • Loan.
  • Sponsor.

Short-term and long-term Auto Financing

Over time, there are two types of Auto Financing: short-term and long-term.

Short-term Auto Financing:

If the maturity is less than one year, for example, a bank loan.

Term Auto Financing:

It has an expiration date of more than one year, although there is no deadline for return (when it comes from friends or relatives). This includes things like capital, self-Auto Financing, or some bank loans.

Internal and external Auto Financing

Depending on where you come from, it can be divided into external and internal.

Internal Auto Financing:

The company uses its financial medium, its activity, to reinvest its profits. It can come from reserves, stocks, crunch, and so on.

External Auto Financing:

One that comes from investors who are not part of the organization. For example bank Auto Financing or sponsor.

Own and Third Commercial Auto Financing

The ability to distinguish between receiving money from its ownership.

Own Auto Financing:

It is from the financial resources of a valuable company and is bound to return such as reserves and capital shares.

Third Relevant Auto Financing:

Although it is owned by the company, it belongs to the third party, it has entered through credit, and at some point, it must be returned.