1. The existence of non-borrowed financing is easily seen in the case of private non-commercial associations.
Or one of these associations, which can be a family. Since its creation, it has had a total of revenue greater than its total expenses. This provided it with a positive stock of non-borrowed financing. This stock is also that of the savings of this association. It was built up thanks to debt. For example, credit Credit has been obtained to finance the purchase of a property.
2. Non-borrowed financing and net worth refer to the same difference.
By entity, this difference is observed between the amounts of two stocks. One is that of investments, or assets, and that of borrowed financing, in other words debts, liabilities in the Passif strict sense.
3. Any mesonomic entity is exposed to the risk that its net worth will become increasingly negative.
If the causes of this deterioration persist, the spiral of growing over-indebtedness leads to a tutelage that replaces the independence that the absence of debt provides with its opposite. An increasingly negative net situation is a cause of exponential over-indebtedness for any mesonomic entity, including first and foremost states.
4. The positive net position of a mesonomic entity other than an enterprise is the same as its equity.
Equity: funds that, literally speaking, ultimately belong to the entity in question and to it alone. Individuals with a positive net position have equity. Under the same condition, non-commercial legal entities have their own funds, such as foundations. All equity is by definition non-borrowed financing. However, not all non-borrowed financing is equity, in the sense defined above.
5. The positive net position of a legally incorporated enterprise is the same as its permanent funds.
In any legal-entity-enterprise, the stock of non-borrowed and permanent financing is equal to its net position provided that the latter is positive. In a corporate business, the non-borrowed and permanent financing is equal to its actual working capital, which in turn is equal to its net position. "Permanent funds" is certainly a little longer to say and read than "equity", but still accurate when the subject is corporate financing.
6. Not paying cash is a way of borrowing.
However, the cash discount system is only fair under narrow conditions. Let A and B be the customers of supplier F. The discount for cash payment is, let us assume, 2%. Customer A gets to pay at 30 days and customer B at 90 days calculated in the same way. In both cases, the cost of the loan seems to be the same: the renunciation of the 2% reduction in the amounts to be paid. However, the payer at the latest is at a substantial advantage. The cost, in relation to the sums borrowed respectively, is in fact three times less for B than for A.
7. This is just one example of the countless economic anomalies to which the ways of financing lend themselves.
Finance, the indispensable form of finance, is obviously not in itself an economic anomie. But how can its violations of the rules of economic fairness be fought victoriously other than by making these rules the cornerstones of the theory of the market economy?