Tuesday, January 11, 2011

Equity Funding For Merchandise Manufacturing

Equity funding is an investment practice that involves mutual funds and life insurance policies. The mutual funds are used to pay off the life insurance policies. This is done by using the value that the mutual fund shares are worth to pay off the premiums of the life insurance policy. This method is very beneficial to the investor because it gives them the protection of insurance with the potential growth of a mutual fund.

The practice of equity funding for merchandise manufacturing is very controversial. Investors tend to have a negative opinion on equity funding due to its association with a company called Equity Funding Corporation of America. This company offered equity funding to clients during the 1960s and 1970s.  In 1973 a former employee of the company went public with information stating that the company had been performing accounting fraud. The company collapsed and an investigation found that more than 100 employees had participated in fraudulent activities.

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