The financing of investment is an object that can be treated through many aspects. In Brazil, most of the works discuss this using the financing restriction literature methodology. This literature, inspired by Fazzari, Hubbard and Petersen (1988), uses investment models with balance sheet data to evaluate the investment sensibility to cash flow (proxy for internal resources) and tests the hypothesis about the (im)perfection of capital markets.

Despite the fact that this literature uses investment models, its main objective is not to understand a relatively simple, but fundamental question, that is how companies have financed their spending in fixed capital – or, what are the proportions between internal and external resources. In Brazil the available evidence is small. Therefore, the main objective of this paper is to discuss how Brazilian manufacturing companies financed their investments in the period between 2006 and 2015. We will try to reach our objective by gathering all the information available that we are aware of. We will use balance sheet data (105 companies), BNDES (Brazilian Development Bank) lendings, and debentures emissions. Finally, we will test our main hypothesis by estimating a panel data investment model. We also conduct a discussion about the financing restriction literature methodology and its main results.

During the period between 2007 and 2012 the companies needed to complement their internal funds with external ones, and these were supplied by BNDES. Debentures that have increased their relative share in the companies’ financing, have little relevance in the investment financing during that period. These conclusions are the basis for different, but relevant discussions concerning the inexistance of a long term capital market in Brazil able to supply companies with adequate financing, and the fact that the Brazilian financial system is not exposed to risks associated with the financing of investment since banks’ relative share in the total financing is small.