https://en.wikipedia.org/wiki/Shareholder_loanTheDukeOfRockford wrote:
Lending from shareholders? Interesting...
It's fairly common for SME companies, usually just agreements to major shareholders via various means.
This is more of a divide in financial reports and for accounting purpose than similarity in their properties. Like shareholder loan should be filed under equity, however it's very much similar to an actual loan, and varied wildly depends on whether the shareholders are natural persons, or holding companies. Honestly a lot of time it's just filed in such a way to "beautify" financial figures so any ratio related to debt or equity would look better.TheDukeOfRockford wrote: I knew there are two common types of capital which is equity capital and debt capital. Stocks would be former while corporate bonds would be latter, as is bank loans, I think.
Notes payable or banknotes, are simply what we now called "paper money" (or fiat currency) today, private issue currency in the early days. They are cheques issued by corporations. Nowadays corporations no longer issue fixed/standardized banknotes, that mostly transferred to the central bank. However promissory notes with arbitrary amounts are still very common and used everyday, mostly as informal tools for delay payments, and most of the time can "cancel" each other out without "actual payment" involved. (Like corporate A holds notes from corporate B, and B holds notes from A, and within the payment date, they can be written out, only the difference need to be paid, or just like tab in a bar as favors, keeps on record for a very long time and can be "used" in later date)TheDukeOfRockford wrote: According to Wikipedia entry on corporate finance, notes payable, also called promissory notes, is also considered debt capital but I don't think it is worth implementing since the article on this particular financial instrument seem to suggest it is really just different from loans in terms of detailed agreements and etc.
Corporate bonds is a very wide categories, and basis for many derivatives. Mostly the complexity comes from secondary markets which don't exist in the game. Financial institutes are also practically nonexistent in current version, so any mechanics that exist in real life will not be able to exist in the game without looking ridiculous or creating huge loopholes.TheDukeOfRockford wrote: Corporate bonds themselves are subdivided into categories like coupons and such but I don't think we would want to over-complicate it in game.
I'm not sure what else to further add to the loan mechanic, I think it is fine as it is, other than having banking become a possible business to enter into which I support. Ideally, a corporation could shop around to get a loan in a best possible deal from a bank. No doubt that would in turn spur the banks to compete, etc.
The issue isn't about "where to get money" for the most part, but managing the risk involved. And "money" itself can be "created" in the process (depend on what definition of "money" we are talking about. The real physical "cash" only consists a very tiny amount in real life corporations. Mostly they are cash-equivalent, and a lot of time the use of "raising capital" doesn't involve actual money at all)