Get financing It is essential for any company. Having cash allows you to make the most of existing opportunities and, likewise, avoid treasury tensions that could hinder or compromise the future of your project.
In reality, almost every businessman, manager or entrepreneur must have financing for companies to your measure. The business loans They are a constant, although conventional banks and financial entities are not always up to the task. Their analyzes of the solvency and viability of each borrower can block the granting of these economic contracts.
1. Are traditional banks the best source of financing for your business?
For a long time, get financing business in a bank was the only possibility of obtaining capital. In this situation of market dominance, these entities had the power to impose their conditions unilaterally.
When the economic situation worsened, business loans They were restricted. They applied strict validations of financial solvency and the economic reliability of each proposal. Many were discarded due to the excessive risk that their operations posed.
Those who were approved often had draconian conditions, with excessive interest, costs and clauses demanding. So much so that, despite the traditional uses in Spain, other uses are here to stay. alternative financing formulas for companies.
2. Some disadvantages of bank financing
Unfavorable conditions and lack of flexibility are the main shortcomings associated with the bank loans for business.
Among others, they could cause you these inconveniences:
The assigned capital cannot be modified.
A guarantee or justification of income is requested in case of non-payment.
In higher risk situations, personal or family endorsement is also requested.
If they are firm loans, their funds must remain unchanged for their purpose.
They include high commissions and management expenses.
Therefore, resorting to other financing modalities is a wise decision.
3. How to get alternative financing
Are you considering other financial sources to support your project? The majority—and certainly the most interesting—are located in so-called alternative financing. There are very attractive options beyond banks!
In any case, its main attributes are flexibility and agility. In addition, these formulas are less expensive in most cases.
Business angels
The Angels investors are private, as well as great knowledge and resources to interpret business. They choose proposals with a differential growth potential and they bet on them by injecting capital.
Entrepreneurs often turn to them to make their projects a reality, to which they add value in their early stages. Their economic participation is of great help to face risk situations and liquidity problems in your company.
Factoring
El invoice discount It consists of transferring invoices pending collection to an external entity or agent before their maturity. In exchange, you advance the amount of these except for a small percentage, which will be the profit of the intermediary in question. That is, from the company Factoring as a Financial Tool for Managing Seasonal Fluctuations in Trucking.
Venture capital funds
It relies on investors who want to risk their money on specific projects. They always do it after carrying out a comprehensive feasibility analysis of each case. They prefer innovation, as well as the existence of an internal rate of return.
Partners with capital
You must be clear that this modality makes you lose certain decision-making capacity in your organization. The necessary financial contribution is made in exchange for participate in the property of the company. Therefore, you get one or more partners in addition to the desired investment.
Direct lending
Get financing through credits from private investors is a very positive opportunity. You are not exposed to credit markets and receive more flexible and personalized solutions.
Ask for money in the immediate environment
It is an immediate trend that can quickly give you results. Is about arrange a loan between individualsUsually friends and family.
The advantages are speed, no requirement for guarantees and the saving of cumbersome or bureaucratic procedures and procedures. On the negative side, it can damage your personal image and spoil your relationship with those you know if things don't go well.
So if you want get financing, resorts to the alternative modality. With the help of an expert advisor—such as WorkCapital—you will have access to these options and productive advice.
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