1. Alternatives for financing companies in crisis
Often, bank financing does not fully cover the financing needs presented by the market.
In addition, it presents rigid solvency criteria that make it extremely difficult to financing a company in crisis.
Fortunately, there are alternatives to traditional banking that you can turn to quickly and easily.
2. In times of crisis, liquidity is crucial
Financing a company in crisis through traditional banking is much more complicated than it seems.
When a company enters an economic tailspin, the lack of cash available in the short term is an immediate handicap.
This shortfall in working capital generates serious problems for the company, for example, limiting both normal operations and the possibility of facing new business opportunities.
It is impossible to invest in technology, people, innovation or advertising. Moreover, it makes it difficult to supply raw materials and even pay suppliers and workers.
As you can see, it is a critical situation for the survival of the company.
Lack of money makes it necessary to resort to alternative financing methods, such as Factoring as a Financial Tool for Managing Seasonal Fluctuations in Trucking.
Why?
Because banks generally turn their backs on their clients when their financial solvency index is in danger.
This situation becomes a negative loop:
The lack of liquidity blocks business activity and prevents the business from refloating.
La bank refusal to finance a company in crisis it becomes entrenched and it is necessary to bet on originality to get out of the problem.
Mostly, the aspects that characterize a company in crisis are:
1.- Minimum income (decrease in billing).
2.- Reduction of sales margins.
3.- Overinvestment that is not acceptable.
4.- Great rigidity and excessive structural costs.
5.- Benefits not derived from business activity, since they are conditioned by extraordinary income.
6.- Excessive debt that minimizes business solvency.
Increasing the share capital, reducing the debt and renegotiating it in the long term are possible alternatives, although with a large notarial and time cost.
7.- Lack of liquidity to assume short-term payments.
Managing working capital is vital, but in times of crisis it becomes extremely complicated.
The treasury stresses they affect 93% of companies in crisis and constitute the biggest of their problems.
El Factoring as a Financial Tool for Managing Seasonal Fluctuations in Trucking and alternative financing in general they are essential to get ahead.
3. Financing options for companies in crisis
The moment in which you most need to inject liquidity into your company is when traditional financial providers become more exquisite.
Its criteria become more demanding, your business situation is exhaustively studied, responses are delayed and guarantees and conditions are tightened.
What can you do in this situation?
Do not hesitate: resort to alternative financing.
Change the chip and look for innovative formulas to finance yourself.
Do you know the Factoring as a Financial Tool for Managing Seasonal Fluctuations in Trucking, for example?
It allows you to advance the collection of your outstanding invoices for a small cost.
It's just an example. There are many interesting similar possibilities!
3.1. private investors
Private investors can help you get ahead.
The venture capital companies or venture capital They are specialists in entering capital or lending financing to businesses with great growth potential.
Even when the economic risk is high, they assume that risk to collaborate with SMEs and startups that they find attractive.
Therefore, they will provide you with that injection of capital that you need at the right time. -as long as the business model is profitable and they bet on the survival of the company-.
3.2. Crowdfunding
This type of financing uses a group of people who contribute small amounts to cover the total amount required by the company.
Often, the contribution is made in solidarity or in exchange for some consideration, not always monetary, it can be perfectly in shares or benefits when purchasing the product.
The expected return is not immediate, as in most conventional financing.
3.3. Factoring
When your corporate liquidity problem derives from the delay in the payments of your clients, the invoice advance allows you to eliminate this difficulty.
Quickly, transparently and hand in hand with specialized companies such as WorkCapital that we are experts in promissory note discount, you convert your credit sales into cash collections.
With this method, all you have to do is provide your invoices to the financial company, who will pay you the amount less the agreed cost. Thus, you obtain the money in a very agile way and, above all, in time to use it to overcome the crisis.
3.4. promissory note discount
This is another option for finance a company in crisis similar to the previous one.
In this case, you have received some promissory notes with bills discount with a future maturity and you are interested in advance your collection.
The speed and efficiency of this system are absolute.
You do not need notaries, there are no withholdings or added risks to CIRBE and in less than a day you will have the money in your account to make your payments.
Consequently, when you need finance your company in crisis, it is best to focus on the alternative financing.
Thanks to it, you will find the cheap oxygen you need when you need it.
From WorkCapital we will help you improve your liquidity situation and, thus, increase the chances of survival of your company.
Do not hesitate to contact us!
