Quite often in the process of doing business, there are times when a company is in dire need of extra money. In this case, the management of the company can borrow money from a credit institution or use a commodity loan. But as a result of such actions, the company will be required to pay a certain percentage, which is assigned for the use of borrowed funds. How is replenishment of working capital in this way beneficial to the enterprise, and what other options are there to stabilize the difficult economic situation of the company?
How to replenish the lack of working capital is most profitable
Faced with such a problem, any company seeks to obtain a loan on more favorable terms, since the additional costs do not contribute to the restoration of economic stability.
A loan for working capital replenishment is easiest to get at a bank. But is it worth rushing with such a step? In addition, the company does not always need it in cash. Sometimes, for the continuous conduct of the economic process, only certain raw materials or spare parts are not enough. In this case, it would be wiser to use a natural loan.
There is another way to get help - this is the replenishment of working capital by the founder. This option is considered the most preferable for the enterprise.
Company Founding Assistance
Seeking help from a meeting of founders is a priority decision. You can replenish the missing funds by making a contribution to the authorized capital, in the form of gratuitous financial assistance and by increasing the property base. In order for the founder to replenish working capital correctly, the consent of 2/3 of the participants is necessary. By decision of the general meeting, amendments are made to the constituent documents. They prescribe the new value of deposits in proportion to the share of each participant. Deposits that are made additionally must be credited to the account no later than two months from the date of signing the decision.
After the final replenishment of working capital will be executed in the form of additional agreements to the constituent documents, it is necessary to submit an application for registration of the changes made to the tax inspectorate.
Pros and cons of investment assistance
The company has the right to use the funds of the founders at its discretion, and without tax consequences. This form of assistance has its pros and cons. The positive point is that the replenishment is not subject to tax payments, since the funds of the founders do not participate in the tax base. Founder assistance is of an investment nature and is not related to the sale of goods and services.
The disadvantages of such a loan can be considered that all changes in capital have to be registered in the tax. Also, with an additional contribution of working capital, the balance between net assets and the amount of the authorized capital is violated.
Getting help in the form of a bank loan
To receive financial assistance, the company has the right to use the credit funds of the bank. At the conclusion of the contract, the conditions for the provision of funds and the terms for their return are stipulated. This replenishment of working capital has its own expense side, which is expressed in the form of accrued interest. In the tax base for income tax, such expenses are taken into account with a certain restriction. Accrued interest can be written off at a rate that is set depending on the size of the current refinancing rate.
The advantage of such a loan is that the bank is a reliable partner, which always acts within the framework of the law. The disadvantages include the large number of documents that must be collected when applying for a loan, interest payments, as well as additional costs associated with opening a loan account. Expenses arising from the use of borrowed funds are accounted for as non-operating expenses.
Commodity loan obtained from a supplier
There are situations when banks refuse to grant a loan, or a company does not need cash, but raw materials. In this regard, the company begins to look for alternative sources of working capital replenishment. Oddly enough, solving the problem may turn out to be simple. Sometimes it is enough for companies to report their difficulties to business partners, namely to those contractors who are involved in the supply of necessary raw materials.
Such lending is called commercial and has its advantages. The participants in the transaction agree on a certain deferral of payment for the supplied materials. Contractual relations are documented and provided either free of charge or with interest. Indirect replenishment of working capital is made out by the corresponding primary documents. The counterparty is required to issue an invoice for the amount of accrued interest.
How is the replenishment of working capital, transactions
Depending on the type of financial assistance, certain entries are made in accounting. If financial injections are provided in the form of gratuitous assistance from the founders, then the accountant makes a posting to the debit of account 51 in correspondence with 98 accounts . Then, the amount received is debited to the credit of account 91.1 for recognition of gratuitous assistance as other income. Upon receipt of property assistance, replenishment of working capital (posting D-08 K-98) is made out depending on the purpose of the values.
For processing credit money, accounts 66 and 67 are used. Funds received on the current account are accounted for by the following entries: Dt 51 Kt 66 (67). The replenishment of working capital by attracting borrowed money allows the company not to interrupt the production process and timely fulfill contractual obligations to customers.