Best Ways To Finance Your Business

Finding the financing we need for our business has never been a simple task. Much less so now, in an economy that is experiencing poor growth and stagnating consumption more than prolonged. Framed in a context of global crisis, setting up a business and even finding the financing necessary to carry it out, is presented as an almost titanic task, with many uncertainties and very few certainties.

This is not to say that there is no way to find the funding that we are going to need. In fact the instruments are there, only that there is know how to find the one that best fits our needs and approach it in the right way. If we did a ranking of these instruments, ordered according to the possibilities that we will eventually be financed, we would find ourselves in a very similar scenario to that described below.

Request A Loan To The Bank

One of the idiosyncrasies of the business fabric, unlike other countries like the United Kingdom, is the high dependence of business on our banking system. Going to the bank to ask for a credit has become standard for more than 80% of small businesses, compared to slightly less than 50% that register their requests for credit in other countries.

In spite of this and in view of the difficulty that many businesses currently have to finance themselves in this way, go to our “friendly banking entity” if our business idea moves in a traditional area (trade, catering, services, etc.).

Exchange Of Services

The exchange of service or bartering involves reaching agreements with other companies in a relationship in which theoretically everyone wins. Although it is not a direct financing method, it is true that it helps to reduce fixed costs and can sometimes represent a very important saving for companies embarking on a relationship of this type.

On the negative side, dependency relationships are created and there is always the risk that one of the parties does not comply in the same way as the other its “part of the deal”, a situation that can lead to undesirable conflicts.

Negotiate An Advance

If we are lucky enough to find an important customer before even launching our product, we can negotiate with it an advance that allows us to finance the launch.

We count on clients who count on us for our image, the confidence they have in us, the quality we have shown on previous occasions, etc. is key so that some of the best can remain as clients for a long time, but may become a recurring way of financing our activities.

Startups Incubators & Accelerators

If our business model is assimilable to a startup philosophy (intensive use of technology, scalable, etc.) it is likely that the place where we are most interested in being at first is in an incubator or a business accelerator.

In the first will help us to translate our business idea into reality and in the second, we will have mentoring and probably external funding to be able to attack the market with certain guarantees.

Present The Project To Venture Capital Companies

If our company can prove that it is scalable and can generate profits in the short to medium term, it may be interesting to start knocking on the door of certain venture capital funds.

The positive part of doing so is that in reality, it is companies that are accustomed to risking and losing the investment because they actually know that if one of their bets goes well, the profit they will get in return will be huge. The downside is that many venture capital firms are more concerned about the profit they can get from the sale or divestment of a company than from the company itself, sometimes forcing the founders to make decisions that they do not really want drink.

Present The Project To A Local Business Angel

Presenting our project to a local business angel is very similar to doing it in front of a venture capital company. The main difference is that theoretically the angel investor has a social commitment to the community in which he finds himself. They are often successful entrepreneurs or investors looking for the development of entrepreneurs who are within their area of ​​influence.

Boostrapping

Bootstrapping is a term from English that refers to starting something without resources or with very few resources. In the area of ​​business, then, it means to exercise some entrepreneurial activity with little or no capital, that is, to undertake only with the means available to them.

One of the biggest advantages of Bootstrapping is the risk, almost zero, since we will not owe anything to anyone and if we fail, we will not have lost too much, we can always try again.

Although it is a slow way   to start, it may be the only way for many entrepreneurs. Highlight that if you succeed you can get an inexpensive, high value experience that will often have repercussions on services, products offered and work capacity.

Conclusion: The business financing is important for your business. But if you have done growing your business well then the next important thing is equipment financing. In case any of the disaster came in your business then these insurance can help you alot. Check more information about equipment financing on their official website at https://sites.google.com/view/equipment-financing/

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