Funding sources briefly. Choosing a source of financing for a business project or development of an existing small business

The main sources of business financing are the allocation of funds for the discovery of an entrepreneur’s idea. For the development of the company, it will be necessary to attract financing, investments, the sources of obtaining funds are chosen by the entrepreneur, focusing on the methods of obtaining financing. With the development of business, new types of investments have appeared, which are divided into categories.

Contributions of money to entrepreneurship are not only the use of personal funds, but also the attraction of money from outside, the transaction is confirmed by an agreement and sealed with a signature, it is a document that is endowed with legal force.

Deciphering the concept

To open an enterprise, to implement a business plan, investments are required, in the tax code there is a concept of a source of business financing - this financial resources that an entrepreneur receives to open a business from external or internal sources.

Money is invested in various business operations that ensure the development of the enterprise.

Economic practice involves 2 sources of funding:

1. Finance attracted from internal sources is a funded system of funds from the profits of the company. Income from doing business has a cumulative system; for the further development of the enterprise, specific funds are used. These are income items: debt, reserve funds, amounts for sold real estate or business income.
2. External sources of business financing are finances that the entrepreneur attracts from outside. Investments of this category can be attracted from investors, financial institutions or borrowed. Subject external funding are banks, government agencies, legal entities, .

The source of fundraising is economic category. Economic instability affects the ability to attract external financing; most business entities are guided by internal reserves. The organization makes deductions provided for by federal law, and the company also has funds that are necessary to pay bills, company expenses, and depreciation.

The profit received from the activities of production is the property of the founder. Income is distributed to business development, part is set aside for reserve capital. Depreciation savings are cash that accumulated during the use of fixed capital. The amount of depreciation funds depends on the direction of the enterprise, its scale.

These savings are used to purchase, replace the intangible components of the labor process.

Internal and external sources have different potential, therefore, it is necessary to attract finance for the development of an enterprise, identifying each concept. Financing a business from external sources is raising funds from outside.

1. Commodity loans are forms of commercial lending that involve the transfer of goods from the lender to the borrower by mutual agreement of both parties. A money loan involves loans in foreign currency, a bank loan requires strict adherence to the rules. A financial institution borrows funds for a specific period, while obtaining a loan is payable service, the bank needs a return guarantee, all items are described in the contract.
2. Allied companies. If a company has the same problems with allies, then their forces are combined, in this way, they benefit from scale and overall economy.
3. Shareholders sell shares, most enterprises consist of tens or hundreds of shareholders.
4. State budget financing, organizations receiving funds from structures are state-owned and not an entrepreneur's income.

The type of lending provides for the signing of a mutual agreement, contract, the document confirms the rights and obligations of each party, regulates their relationship.

The need for credit arises in both large and small enterprises, government agencies programs are provided to ensure the financial security of entrepreneurial work.

The source of the loan is the stock market, business entity, state, owners, employees of the enterprise. Those loans that are external sources of project financing have a wide range of choices and flexible programs.

Receiving financial support is a help to the enterprise at the stages of development. The owner chooses the types of business financing independently, focusing on the production process. Every entrepreneur has the right to receive funds.

Federal legislation determines the types of financing, after a comparative analysis, choose the best option:

• lending;
• leasing financing;
• trade loans;
• state subsidy.

Economic activity involves attracting investments. To maintain the right to full ownership of the enterprise, the owners attract funds from state programs.

Financial institutions offer credit transactions, the conditions are stipulated by the contract. Short-term liabilities loans are in first place in the ranking of sources of raising finance.

Bank loans are used to pay off costs from the industrial sector, agriculture, to pay off mortgages.

Financing through a bank has advantages and disadvantages:

1. The speed of receiving funds, many banks provide services within a few hours or days, depends on the amount of the loan. The entrepreneur independently distributes the money, without the controlling party, the investor.
2. The negative side is the short maturity of the debt up to 3 years. According to the loan program, the bank imposes interest on the amount taken, insurance premiums are valid. Depending on the loan, claims from the bank are acceptable.

Loans are taken from financial institutions with strictly established requirements, the transaction is certified by a loan agreement, with clarification of the conditions. Loans have a positive and negative side, if a quick source of money is required, then entrepreneurs apply to the bank, but having agreed to the creditor's demand.

Leasing program

Business development is impossible without attracting investments, if the owner wants to reach a new level, then he will need internal or external sources of business financing. Leasing - the possibility of obtaining funds from the main fund, the opportunity is presented to the entrepreneur, subject to subsequent redemption. The subject of leasing is not only cash. These are: land, transport, real estate, movable property, technology.

The program has the following general characteristics:

1. The program does not require the submission of collateral, such as a rented product, real estate. General terms leasing is acceptable in relation to a loan from a bank, the payment of the entrepreneur is related to the specifics of the company's activities.
2. The negative point is the payment of the down payment, depending on the scale of the purchase, the amount reaches up to 30% of the price of the property.
3. If the owner of the organization has a simplified taxation system, then he should clarify the conditions for obtaining a loan with the leasing company. Tax is charged on the amount of such loans.

You can take money from funds for support strictly following established rules. Depending on the specifics of the enterprise, a leasing company is chosen.

trade loan

When opening an enterprise, the owner enters into agreements with suppliers and other firms. Interaction with companies allows you to buy goods, products in installments or with a deferred principal payment. This method is acceptable for entrepreneurs who are engaged in the sale of goods not own production. The owner buys a batch, and the calculation is made after its sale.

The situation on the economic market implies the attraction of financing. An entrepreneur starting to work is counting on benefits from the state. To implement the business plan, a subsidy is allocated - a one-time payment from state financial institutions, regional authorities, international charitable organizations, foundations. The money repays part of the expenses for opening an institution, repayment of contributions.

Federal legislation regulates the legal procedure for opening individual entrepreneurship regarding the taxation system.

Cancellation of the tax deduction or tax holiday is received by individual entrepreneurs:

• registering a business for the first time;
• chose a simplified taxation system, a patent;
• the enterprise is involved in the scientific, social, and production spheres.

Benefits apply for 2 years, with the development and operation of a private enterprise. Allows you to save money and invest in the future.

Loans are taken on a repayment basis, the source of raising funds for business development complies with the established lending program with repayment of interest on the loan.

Positive and negative aspects of internal and external sources of financing

The source of funding has different directions, receiving grants for starting a business is gaining popularity. International charitable companies offer fixation interesting ideas from young entrepreneurs.

An attractive source for business development is a grant - this is a gratuitous targeted subsidy.

This method of investment has positive aspects, in order to receive funds, it is necessary to draw up a project correctly and interest the organization.

After analyzing the financing of a business, they identify sources that have positive and negative sides. Every year there are government programs to stimulate and develop small businesses, subsidies are valid in the long term. Each type of fundraising has its pros and cons.

Internal sources of financing have the following characteristics:

1. The positive side of attracting domestic investment in a simple scheme for obtaining funds, while not requiring the permission of outside individuals or legal entities.
2. There are no additional interest payments, there is lending.
3. The negative point is the limitation in the amount of funds, the inability to receive an increase in funds.

External sources have the following nuances:

1. A positive factor is unlimited funds, growth of the organization's potential, development and growth of the company. Increasing profits after financing, a jump in business profitability.
2. Credit obligations are the risk of bankruptcy, repayment of interest, payment of contributions reduces the final profit.
3. Regardless of possible difficulties, the entrepreneur is obliged to fulfill the conditions established by the financial institution, prescribed in the contract.

An individual entrepreneur independently chooses a way to develop an enterprise, taking into account the pros and cons of financing.

The attracted investments act as a source of financing, the owner of the company independently chooses an acceptable option. Species are established by law, have a positive and negative side, before use aids analysis of the economic market is required.

Any business needs funding at the stage when it is just starting and has not reached self-sufficiency.

Young businessmen need support, and since the state is in no hurry to provide it, they have to look for alternative options, where everyone chooses according to their taste.

External options

External sources include those that are not associated with the firm itself and allocate money from outside. They may be attracted by different things - from a share in the profits to a percentage of the debt - but the essence is always the same: you can always find someone who will finance the project.

There are two types of them:

• Debt. These are sources that provide money at interest and timely return. This method of financing is considered the best, since it implies that the relationship between the lender and the borrower will end as soon as the entire loan and interest on it are paid. However, there is a risk: if the company is unable to repay the loan, this will affect its reputation and overall financial condition.
• Equity. These are sources that provide money against a share in future profits or against a share in a firm. The relationship with the lender will never end, because after the conclusion of the contract, he becomes the owner of a part of the borrower's organization.

Debt includes:

• Loan secured by property. In this case, the guarantor that the loan will be repaid becomes the property of the borrower - most often immovable, as the most stable both in price and in safety.
• Overdraft. A loan in which the amount of the debt is paid not in installments, but in full, within a specific period.
• Bonds. In this case, the company pays with IOUs, securities, which imply that the debt will be paid on time.
• Leasing. In this case, the organization receives an asset in advance for use, as if on a lease, with the right to repurchase it later. It is considered the most profitable way of lending, since it involves receiving not just money, but a certain useful thing in work.

Shares include:

• Equity raising. In this case, the company issues shares, which over time will begin to bring profit to shareholders. At correct advertising and a well-thought-out business plan, you can make good capital on them.
• Attracting venture capital. Venture capital is like a game of Russian roulette - investors provide young companies with money if they find it interesting. In return, the investor receives a share in the company's income.

All external sources of funding involve risk. Loan defaults, investors misbehaving or refusing to invest further can undermine the fortunes of a young firm. Therefore, it is believed that the best solution is to try to survive on internal resources.

Internal options

Internal sources include those that do not require the involvement of people from the outside and do not differ in such great risks. Among them:

• Undestributed profits. If the company already has the first profit, it can use it to satisfy its needs and provide the next profit, which can be used to expand and improve the enterprise.
• Automatic funding. In this case, the passive credit debt of the company increases, as well as distributed, but not yet paid wages. They are used to meet the needs of the enterprise, which significantly increases its risks - if the business does not pay off, there will be nothing to pay wages and repay the loan.
• Capital optimization. In this case, finances appear due to the reorganization of the business. For example, a company buys better machines that will run twice as fast in the future, or cuts gas costs to free up more money.
• Getting rid of non-core assets. If an asset does not bring benefits, you can sell it and buy something that will bring it.

In general, the competent use of internal assets and start-up capital is the key to any successful business. But sometimes you simply cannot do without external financing - at the initial stages, for example, when the activity goes to zero and is not yet profitable.

You can learn more about all the options for raising funds from the following video:

What do you need to get investment?

Money doesn't come from thin air. To get funding, you need to attract an investor, and to do this, you need a few things:

• A well-thought-out business plan that an investor can be interested in, and preferably a person who can present it. It should indicate:
  • The idea and purpose for which a business is created.
  • Its description is what it will bring to people, how it will look for the consumer.
  • Investment proposal - what exactly is required from the investor and what he will receive if the business works out.
  • Team - who is going to work on the project and how professional these people are.
  • Product, market and production - how the product or service will be produced, how it will be sold and whether buyers are interested in it.
  • Assets - what does the firm have in order to do business? Intellectual property should also be mentioned in this paragraph.
  • Business model - how everything will work, how the activity will be arranged from the inside.
  • The economics of the project are the estimated financing, start-up capital, the time when, according to the forecast, the first profit is expected.
  • Actions to be taken after the investment is received – what will be bought, what will be improved and where it will lead.
• Pledge. If it is not possible to attract an investor solely on the idea - and this may well happen if it is not truly brilliant (and in this case history knows examples when a genius never found funding), something will need to be offered bank as collateral for a loan. Real estate or a car is fine.
• Credit history. To get a loan, it is necessary that there are no past due debts.

In addition, you need patience in order to continue trying after the tenth refusal, and determination, so that even after the hundredth “no” you continue to believe in your project and achieve its implementation.

Financing- a way to provide entrepreneurship with cash. Internal sources of financing - sources of cash receipts that are formed from the results entrepreneurial activity. These can be investments of the founders of the company in the authorized capital; cash received after the sale of shares of the company, the sale of the property of the company, the receipt of rent for the lease of property, income from the sale of products.

1) Profit (gross)- the difference between its income and costs or production costs, i.e., the total profit received before all deductions and deductions are made. net income(residual profit) is the difference between the amount of sales proceeds and all costs of the enterprise.

2) Depreciation- depreciation of fixed assets calculated in monetary terms in the process of their application, production use. The instrument for compensating for depreciation of fixed assets is depreciation deductions in the form of money allocated for repairs or construction, or the manufacture of new fixed assets. The amount of depreciation is included in the production costs (cost) of products and thus goes into the price.

External funding sources

1) debt financing - borrowed capital(short-term credits and loans; long-term credits).

- Loan capital is an independent part of economic capital, which functions in the form of cash in the field of entrepreneurial activity.

- Mortgage loan - mortgage loan. This loan is the most common form of secured loan. Its essence is that the company, when receiving debt financial resources guarantees the creditor to repay the debt, including interest.

- Trade credit is a commercial loan, which means that an entrepreneur buys a product by postponing its payment.

– Shares are a common form of raising money. By issuing and selling shares, an entrepreneurial firm receives a debt loan from the buyer, as a result of which the shareholder acquires the right to the property of the company, as well as to receive dividends. Dividends in this case are interest on a loan, which is presented in the form of money paid for shares.

2) Transformation of an individual enterprise into a partnership.

3) Transformation of the partnership into a closed joint stock company.

4) Use of funds from various funds to support small businesses.

5) Gratuitous financing is the representation of funds in the form of gratuitous charitable donations, assistance, subsidies.

Selling shares is also a way to raise finance from outside, and is a very important source of funding, as a firm can have hundreds or thousands of shareholders.

State budget financing:

– The state allocates funds to public sector enterprises in the form of direct capital investments. Public sector enterprises are owned by the state. This means that the state also owns the profit from their activities.

- The state can also provide firms with its funds in the form of subsidies. This is a partial financing of the activities of firms. Subsidies can be issued to both public and private firms. The main difference between state financing and a bank loan is that the company receives funds from the state free of charge and irrevocably.

- State order: the state orders the company to manufacture a particular product and declares itself to be its buyer. The state does not finance costs here, but provides the company with income from the sale of goods in advance.

Investment is necessary not only during the launch of the business, but throughout its operation. Sources of business financing can be from personal funds and coming from outside. External capital is attracted at the time of lack of own capital to pay off debt, or as assistance in expanding the production line. In Russia, the state also provides support to entrepreneurs, annually informing social services about its nature.

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Classification of funding sources

Main Sources of business financing are divided into the following types:

• creditors;
• investors;
• own finances.

Companies that have established a workflow in accordance with their business plan can afford to finance entrepreneurship on their own. In most cases, the entrepreneur is supported by other external sources. It should be remembered that the use of third-party capital increases costs due to deductions.

Internal sources

When an enterprise can be self-financed without outside help, the owner has full control over the business.

Examples of domestic funding sources:

1. Net profit. Investing most of the funds in further development allows you to ensure a successful existence and reduce the risk of ruin.
2. Depreciation deductions. That monetary asset that could be spent on the repair and maintenance of equipment.
3. Accounts payable. It involves the postponement of bank payments with an increase in their size in the future. Can be used as a temporary measure.
4. Retention wages employees of the enterprise. Financial documents are used to calculate and accrue salaries, which are not actually paid. Delay can be a short term measure.
5. Factoring. This source implies a deferred payment by agreement with the supplier company or the manufacturer of the necessary components.
6. Reset assets. In the case when the company has a direction with unprofitable, zero or low profitability, you can get rid of such a line in favor of another.
7. Reserve fund. Funds earmarked for unforeseen financial expenses.
8. Process optimization. Allocation of funding to the most profitable production or creating a new additional source of income.

Government funding

Support programs for start-up entrepreneurs are posted on the website of the Ministry of Finance. To receive assistance from the state, it is necessary to draw up a business plan with a mandatory indication of the payback period.

It is important to keep in mind that in order to receive finance, one approval of a business plan is not enough; you must have your own resources available. The state partially covers the expenses of the entrepreneur, depending on the type of assistance. Or becomes the customer of the produced goods and services.

Interbudgetary state relations

In 2020, the following types of state support are provided:

• free advice on legal and other issues;
• payment for education necessary for the implementation of a business idea;
• assistance in purchasing production capacity at the lowest cost;
• cash assistance in the process of production (partially) and rent of public premises;
• financing of 20% of the cost of purchased raw materials;
• partial repayment of loans;
• grants;
• subsidies;
• preferential participation in events such as an exhibition or fair;
• business incubator (profitable lease of state premises);
• guaranteeing the obligations of the entrepreneur to the bank.

O state support small and medium-sized businesses in Russia are detailed in a video taken from the Aktiv Finance Group channel.

Grants

Grants imply a one-time assistance from the state. The amount of assistance is regulated by the Budget Code of the Russian Federation. The Accounts Chamber will necessarily control the movement of allocated finances. If they are spent on needs that differ from those indicated in the business plan, the state will not continue to help and cover the costs in the future. As a rule, subsidies are allocated to entrepreneurs who produce goods included in the consumer basket or benefit the region. Basically it is agriculture.

tax incentives

The Law of the Russian Federation No. 477-F3 refers to the possibility of temporary relief for entrepreneurs. Under certain conditions, an entrepreneur can be exempted from paying taxes for a period of 2 years. To receive benefits, you must have the first registration with a simplified taxation system (STS) or a patent (PSN).

Screenshot of the main page unified registry tax holidays What taxes must be paid if there is a subsidy Terms of tax holidays

Lending

A loan from the state comes in several forms:

• allocation of funds;
• bank loan guarantee;
• export assistance.

Interest on credit funds will be lower than in a bank. When receiving money to repay a loan, it is possible to receive a deferral of payments.

Bank lending

It is possible to obtain a bank loan secured by property or working capital. Banks provide various lending programs for small and medium-sized businesses. As a rule, the amount does not exceed 1 billion rubles, and is issued for a period of up to 3 years. The loan rate is 10-11% per annum and cannot be higher. Funds are allocated for the purchase of equipment or for other purposes specified in the contract. At the same time, the bank that gives the loan becomes a business partner. This gives him the right to control financial condition entrepreneur until the full repayment of the loan and the interest rate on it.

There are a number of industries that lenders prefer:

• Agriculture;
• construction;
• transportation;
• food production;
• communication services.

Leasing

Leasing involves the long-term lease of property, equipment and/or tax benefits. In the latter case, when it comes to renting premises or production facilities by an entrepreneur, a subsidy can also be provided to the lessor.

Leasing involves the ability to buy out leased assets:

• company;
• land plot;
• structure;
• vehicle;
• property.

The advantage of this lending method is that no collateral is required. If the entrepreneur redeems the assets, he pays their real actual cost - without any extra charge. But when applying for a loan, you must pay up to 30% of the assessed value of assets.

In Russia, not all types of activities are leased. It depends on the form of taxation.

The amount of loan payments is included in the enterprise cost fund and VAT is charged on it.

Trade loans

These relationships involve the provision of deferred payments from firms with which the entrepreneur cooperates. This applies to the field of trade, when the goods of another supplier are sold. The form of relations in the form of an exchange is possible. A product is exchanged for another product or service.

Equity financing

This type of assistance involves attracting an investor who becomes a co-owner of the business. He makes a one-time contribution to statutory fund with possible further investments. Sometimes investing concerns one of the directions.

Bonds

Bonds are loans with interest. It is paid by the entrepreneur to the investor.

The following options are possible:

1. Coupon. Loan repayment is carried out 2 times within 12 months. The conditions may be different, for example 3-4 times. It is written in bonds. The interest rate (annual) is broken down accordingly.
2. Discount. In this case, the interest rate is floating.

A variety of bonds depending on the timing of issue:

• short-term - 1-2 years;
• medium-term - 5-7 years;
• long-term - from 7 years.

Overdraft

Overdraft is bank lending by opening a credit account linked to the main account of the entrepreneur. Maximum size of this type of loan is 50% of the average turnover of the company's funds per month. The loan guarantees the provision of payments for any needs of the company, if at a particular moment the company's personal funds are not enough. The bank charges a fee for maintaining the main account and exposes a loan interest when the entrepreneur does not repay the debt within the agreed time frame. Such repayment occurs by synchronization with the main account and automatic money transfers.

When choosing sources of financing for business ideas, most entrepreneurs do not take into account that investments are needed not only at the stage of opening, but also throughout the life of the established enterprise. If you want the project to be successful and long-term - learn how to raise funds!

The concept of "business financing" and classification

This term means the supply (providing) of entrepreneurial activity with financial resources. Depending on the place of origin of material resources, internal and external financing are distinguished.

On the initial stage formation production process managers use external resources, the origin of which is provided by the following sources:

• state ;
• banking organizations;
• shareholders;
• non-profit companies;
• partner firms;
• individuals.

When production begins to generate income, it becomes possible to attract internal resources, including:

• net profit;
• revenue of the future periods;
• (deductions for equipment);
• target reserves allocated to cover future costs.

Ideally efficient and profitable business- self-sustaining and does not require external costs. However, at first and during the expansion of the scope of activities, it is difficult to do without appearance funding - further on each of them in detail.

The main sources of business financing in comparison

Common among subjects economic activity practice - attraction of borrowed money. To maintain the right to full control own business, most entrepreneurs take loans, credits, loans.

Bank lending

Loans from banks occupy a leading position among the ways to finance small businesses, covering an extended range of cost assignments: industrial, consumer, agricultural, mortgage loans.

pros:

• prompt decision on extradition;
• independent distribution of funds without control and instructions from the investor.

Minuses:

• short term of use (standard - 36 months);
• the need to provide collateral; mandatory payment interest and premiums.

Leasing programs

Leasing is a complex form of financial lending based on the provision of fixed assets for rent with subsequent redemption.

The subject of leasing can be enterprises, land plots, vehicles, equipment, property (movable and immovable).

pros:

• financing is calculated in 100% ratio with the cost of equipment - for comparison, banks require 10-15% of the price;
• there is no requirement to provide a pledge - such is the leased (purchased) equipment (site, transport);
• debt in the balance sheet of the organization does not increase;
• more loyal conditions in comparison with a bank loan;
• all payments by the lessee are included in the costs of the enterprise.

Minuses:

• when applying for a lease, you may need an initial fee- up to 30% of the value of the property;
• not all leasing lending schemes are suitable for entrepreneurs working under a simplified taxation system - you should carefully choose a company for cooperation;
• VAT is charged on the lease amount.

trade loan

Form of mutual settlements between firms. You can order the necessary goods (equipment) with a deferred payment. This method is often used by entrepreneurs whose activity is the sale of products from another manufacturer: they take a wholesale batch of goods for purchase, and the calculation is made after it is sold in a retail network.

It is also possible to mutually beneficial cooperation between firms of different directions - the ordered goods (service) are paid in kind - by what another company produces.

State subsidies, tax incentives

Beginning entrepreneurs receive government assistance in starting a business. One of the means of such assistance is grants. These are one-time payments from the state, bodies local government or international organizations to cover part of the costs, capital costs or contributions.

In addition, the taxation system provides special conditions for individual entrepreneurs (IP), regulated federal law No. 477-F3.

The following individual entrepreneurs can obtain the right to tax holidays (zeroing the tax rate) in 2016:

• registered for the first time;
• who have chosen one of the taxation schemes - simplified (STS) or patent (PSN);
• leading activities in the social, industrial or scientific sectors.

Holidays are not established throughout Russia, in each region they are established by the local authorities at their discretion. The benefit is also valid in 2020. Please note that it is calculated for two tax periods (years) for each specific individual entrepreneur.

Nevertheless, no matter how good and promising the idea may look, minimize expenses and rely on your own resources, remembering the notorious saying: “You take someone else's, but you give yours!”

Grants and other sources of project funding

Undoubtedly, the most attractive form of small business financing is a gratuitous targeted subsidy for Scientific research, training, treatment and implementation social projects. However, to be eligible for a government or commercial grant, your idea must meet the following criteria:

1. presenting an evidence-based justification for the importance of the project;
2. quick payback - grants are allocated for a short period (from several months to a year);
3. a clearly developed plan for the implementation of a business idea with an indication of the timing of achieving the goals;
4. willingness to take on a certain part of the costs;
5. a report for every penny spent from the allocated funds.

Although state grants are more designed to support scientists and young professionals, Russia annually allocates funds from the budget to subsidize small forms of ownership.

In parallel, they are being developed at the state and regional levels - information on existing projects is presented in the territorial employment centers and on the official website of the Ministry of Finance.

Foreign investors are also looking for promising representatives of small businesses and are ready to invest impressive sums in the development of interesting projects. However, keep in mind that such “donors” often demand a share of ownership or a large percentage of the profits in return, and also set the condition for officially securing authorship of the idea.

If you cannot do without attracting additional investments, once again make sure that the decision, calculate all possible risks and set yourself a time frame for repaying the loan, which you will definitely meet!