Domestic lending in holding companies: theory and practice

The article examines the content of the topic of intra-firm lending, which is relevant for large-scale enterprises of the corporate sector of the economy, which, along with transfer pricing, forms the basis for financing the production and investment activities of structural divisions in their composition. Taking into account modern theoretical approaches and established business practice, the article considers the goals, forms, methods of organization and features of applying intra-firm lending and transfer pricing for intermediate products in domestic and foreign corporations. The paper presents a theoretical generalization of the experience of organizing internal financial management of the largest holdings and companies that actively use this form of lending in their activities. The advantages and disadvantages of intra-company lending under the conditions of institutional restrictions related to the legal form of the holding are substantiated. An example of calculating the effect of transfer lending for a fixed period of time is given. The article presents the author’s conceptual mathematical model for selecting the optimal level of transfer lending rates for production costs of structural divisions within a holding company, which can serve as the basis for instrumental support for the system of intra-company calculations of a large integrated production structure. Focuses on a method of intra-firm credit and insurance, for examples from specific firms, the analysis and conclusions on the system of intra-firm lending.