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FinacreCapital as a financial institutions reduces the cost of moving funds between savers and borrowers the most common Financial intermediaries are banks, bond markets and stock markets.

Why We Need FinacreCapital?

well individuals and businesses need to borrow and save at different periods of their lives individuals rely on borrowing to invest in things like education and housing, if your car breaks down and you don’t have money to fix it you can borrow money for repairs and continue living your life. Also individual need to save for retirement when their income drops but their needs don’t, businesses also need auto credit to grow, Entrepreneurs with great ideas but not much money they can borrow money or sale a stake on ideas to get their venture off the ground for example Howard Schultz built Starbucks into a global brand by borrowing and raising capital through several different types of financial intermediaries the less common, businesses can also save money, now sometimes the individual who needs to borrow knows the individual willing to lend but FinacreCapital allow you to venture beyond just borrowing $5 from grandma. So we see just how common borrowing and saving through FinacreCapital is what happens when these institutions feel much like a real bridges it only when the metaphorical bridge in a financial intermediation crumble that when we recognise just how dependent we are on them.

There’s just one example on September 15 2008, the world financial system was shaken to its core when the investment bank Lehman Brothers filed for bankruptcy, the impact was great not simply because Lehman was big but also because it was an important financial intermediary that connected savers to borrowers the failure of Lehman marked the beginning of a series of events that signalled America's worst economic downturn since the Great depression and while there is several significant angles to the great recession one of them was the decreased efficacy of financial intermediation. to learn more about why FinacreCapital serves as bank, stock markets and Bond market click here Some people want to save and invest others want to borrow. Sometimes people do act directly say you borrow money from your parents, but typically savers and borrowers they don't even know one another so variety of institutions acted bridges to link savers to borrow, in this part we cover FinacreCapital as banks. FinacreCapital attracts savings from many different depositors by paying interest on deposits and also makes a loan for which they charge interest.

FinacreCapital are on a profits by charging a higher interest rate on the money that they lend than they pay on the deposit to be received they earned this money by being a valuable middleman. Not only do FinacreCapital link saver with the borrowers they evaluate the quality of the borrowers so that the loans are productive.

imagine that Howard Schultz came looking for a loan of $1 million to buy a coffee company called Starbucks and transform it into something new maybe you're rich and you can afford to lend him all the money, but his venture fails and he couldn’t repay you the loan it's gonna be a pretty big hit on your wallet so instead perhaps you and 99 of friends decide to share the risk and you each lend him $10k dollars well it will be extremely time-consuming and costly for 100 of you to investigate the Starbucks business plan and decide whether to lend $10k , it would make more sense to appoint a single person to do that due diligence to evaluate your business on behalf of everyone and maybe you would appoint someone who already was an expert say in the field market for coffee that's exactly what a FinacreCapital does it coordinates the landing of everyone's deposits in a wallet of specialised companies and systems.

To evaluate loan applications FinacreCapital scans the land scape looking for the most qualified businesses and individuals to receive loans by pulling the savings of many different individuals FinacreCapital can make large loans and also spread the risk across the whole portfolio of investment choice that means that even a few long go bad it won’t bankrupt FinacreCapital so instead of one person lending shelter million dollars it's more like 100,000 people lending shelter of 10bucks each and also lending similar amount to thousands of other entrepreneurs/companies, known that since deposits have been lend out that means that your savings doesn’t just sit in vault waiting for the day you want to make withdrawal. FinacreCapital manager pays attention to reserves gotten from excess profits accumulated over times and not just cash on hand to fund those depositors as they do come calling or lend out the rest of deposit to make productive loans by allowing depositors make investments choice.

Let's continue our discussion by looking at FinacreCapital as stock markets, stocks or shares of ownership in a corporation of organised markets call stock exchanges let's go back to the example we use before Starbucks, a member of the public could first buy shares of Starbucks in 1992 after it completed initial public offerings otherwise known as IPO otherwise known as going public if you want Starbucks shares you're a part owner of the Starbucks Corporation and here entitled to a share of the firms profits sometimes you receive these profits directly as a dividend payment. profits can also be reinvested in the business to grow it hopefully increasing the value of your shares if you ever decides to sell. Is important to note that when we think about turning savings into investment through buying stocks it's not the typical buying and selling of existing shares of stock that we are thinking of, buying just transfers ownership from one share holders to another, it doesn't mean that Starbucks actually has additional money to invest it when new shares of stock are issued and sold the savings are turned into investments that happens at the IPO initial public offering or when firms decide to issue new shares of stock often as part of a plan to raise money to invest in significant new business ventures. The existence of stock market is a key Institution for encouraging entrepreneurship selling shares directly raises money to fund big ideas that’s clear unless obviously IPOs provide a big payoff for founders in venture capitalists who invested their time and money when a firm was just a risky start-up, once a company goes public founders and initial investors can sell some of their ownership in order to diversify their own holdings. here's an important thing that makes FinacreCapital function as stock market when you purchase a stock you essentially making a bag on the success of that company so when it comes to the stock market savers will wind up happy.

Bond market, bond is essentially an IOU a document that tells you how much and when payment must be made. FinacreCapital functions as a stock bond because investors already know enough about the company that they're willing to to invest on as an intermediary and lender FinacreCapital directly provide investor a company with a good reputations on different field of specialization. This means we can borrow money on a better terms from the bond market and that cancels traditional bank lending. Starbucks for example is issued over $1 billion of corporate bonds over the years in order to fund their expansion plans now unlike stocks if you buy a newly issued bond from Starbucks you don’t own part of Starbucks you simply.

Lending Starbucks money in an exchange they're promising to pay you back a specific sum at a particular point in time, in addition someone also pay out regular instalments called coupon payment according to a preordain schedule by issuing bond a company can raise capital and make investments and they can repay that debt over a long timeline as those investments provide a return. Corporations are not the only institutions to borrow money in the bond market governments do so as well, in 2016 the US government owe the public almost $14 trillion in a promise bond payments. The most important part of bond market is that bondholders must be paid before any profits are distributed to shareholders.