Is there a form of financing other than that offered by banks?
The answer is affirmative, and also, this new alternative financing is gaining more and more followers, both among companies and individuals.
Traditionally, banks have been the main source of credit and financing, which has given them a practical monopoly in the market, with few variations between the conditions offered by one and the other.
Fortunately, financial institutions are no longer just banks, but there are various financial entities that offer financial solutions adapted to the needs of their clients. This offers greater freedom and flexibility when it comes to obtaining financing, allowing it to be personalized and adjusted to the needs of each individual or company.
1. Why are banks no longer the only way to finance yourself?
The benches They are organizations whose main objective is to manage the money of their clients and obtain economic returns.
The germ of these institutions dates back to 2000 BC. C., when merchants from Phoenicia, Assyria and Babylonia began to lend grain to those who needed it.
It is interesting to note that this practice developed before the use of money as we know it today.
Over time, barter evolved until gold, silver, and copper were established as currencies. In ancient Greece and Rome the concept of public bank was created, which laid the foundations for the current operation of financial institutions.
The digitization of cash, which took place after the year 1900, thanks to the rise of telecommunications and information technology, represented a significant change in the banking sector.
Credit cards and ATMs were the first steps towards an unprecedented technological revolution.
2. Why an alternative to traditional financing emerged
There have been various reasons that encouraged the development of new economic formulas for working, lending and managing capital.
While the benches followed a policy of progressive concentration and their customers were dissatisfied, a financing alternative with multiple variants. Above all, it provided agility, flexibility and greater risk acceptance.
The situation and context of recent times have contributed to the diversity of the financial entities.
The difficulty in accessing credit, the restrictive interest rate policies and the lack of adaptation to the needs of clients have been determining factors that have motivated the public to look for other possibilities.
In parallel, entrepreneurs, lenders and investors have created new proposals for alternative financing. This has consolidated a banking disintermediation that has been established as a common practice.
In general, it is considered alternative financing any financing option not dependent on a bank. Its diversity and adaptability endow it with a great attraction and interest.
3. What is the best form of financing against banks?
Indeed, in the context of banking institutions, There are various options available for businesses or freelancers who require capital. It is important to note that each option is specifically adapted to the needs of each case.
Consequently, it is possible find a specific financing format optimally adjusted to the situation of each applicant. This situation is due to innovation in the current economic and credit landscape.
4. Some highly recommended new financial options
La flexibility in deadlines and less demand for guarantees are the attributes best valued by users of this new form of financing. In the last decade, there has been an increasing trend in the popularity of these financing options, presenting an advantageous opportunity that you should take advantage of.
Among its most interesting and demanded options are the following:
– Factoring. It consists of assigning your collection rights to a third party in exchange for a commission on their amount. In this way, the collection of invoices can be advanced in advance and use the assets themselves to finance themselves.
– Discount of promissory notes. It is a formula similar to factoring, but applied to payment documents. The money is deposited before its maturity and, if this system is contracted without recourse, the risk of non-payment is eliminated.
– Venture capital or risk capital. Directed at start ups, It implies the incorporation of external investors in promising projects with possibilities of future profitability. In this way, they become corporate property and sell their shares when they consider it appropriate to recover the loan provided.
–Crowlending. They are loans granted by small investors grouped together to provide massive financing.
– Crowdfunding or reward crowdfunding. A group of people come together to make economic contributions to a project or company with the intention of obtaining a reward, be it monetary, physical or emotional.
As can be seen, there are various financing alternatives effective at benches. new financial entities They offer different solutions that you can take advantage of.
With the support of WorkCapital, we will help you throughout the process, ensuring that you make the best decisions for your business at all times.
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