Another consideration above and beyond the links between funding supply and demand, is that of the form which financing should take. Fundamentally there are four types of financing:

• subsidies, donations and lost equity finance, i.e. the definitive provision of funds with no reimbursement obligation;

• credit, i.e. the provision of funds for a given period at a predetermined interest rate;

• guarantees, i.e. accepting the risk so as to facilitate access to a loan from a conventional financial institution;

• equity participation, i.e. investing equity capital into a project, the returns on which are determined by the success of the project.

Each of the above types of funding provides for an infinite range of possible financing formulas, depending on the type of application (levels of co-partnership, interest rates, deadlines, forms of monitoring, etc.). And each particular type of application has its advantages and disadvantages, which must be evaluated in order to make the right strategic choices.

The following table briefly summarizes the main advantages and drawbacks of each of the four funding types.