Funding

Funding is the provision of monetary resources in order to finance a capital project, operations, or a special project (such as research). The funds may come from internal reserves or outside providers of capital, such as creditors, lendersinvestors, or donors. Common sources of funding are as follows:

  • Donor contributions

  • Equity-based crowdfunding

  • Government grants, subsidies, and tax credits

  • Investor stock purchases

  • Loans

  • Operating credit from suppliers

  • Rewards-based crowdfunding

The term can also be used in a more narrow sense, where it implies that funds are being allocated to an internal project from internal reserves. This application is most commonly found in government entities.

Funding is more easily obtained when there is a specifically-defined need for it, along with a business plan, collateral, and a statement of projected cash flows.

The reverse of funding is defunding, which occurs when funds are either withdrawn from a targeted project or when the promise of additional funding has been terminated.

Related Courses

Corporate Cash Management 
Corporate Finance 
Treasurer's Guidebook