We know that as an entrepreneur you must face many challenges to enforce your business idea, but once you overcome them and succeed in trying a bit of success. The next step is to continue to grow your business even more and take it to where you have visualized it. Therefore, we want to share with you everything you need to know about financing to help you and your business achieve their goals.
First, it is good that you know that you do not really need to exhaust your profits or savings in those projects that will help your small or medium business grow. That is to say, the loans are an aid to solve the expenses of those actions that aim to increase both the value of a business and what it generates, without the need for you to exhaust immediately all the liquidity that has been achieved so far.
Then, you can find the financing to help your business as we will tell you what types exist and certain important characteristics that you should consider to choose the right one.
Banks offer loans for businesses that work in the following way. First you must go to the branch to get all the necessary information and then fill out an application with basic information about yourself and your business. The requirements that normally handle is that your company has a minimum of 2 to 4 years. In addition to that you must gather 12 months of account statements, the last two fiscal years complete plus one partial, have a guarantee or guarantee and open an account with them.
About the offer, the amount they can offer ranges from 2 million to 15 million with a rate of around 24% with no chance of decreasing according to your business. That is, its rate is fixed and only tends to vary in increase, in addition to the terms are 12 to 36 months with opening fees.
Fintechs are financial institutions regulated by Sandries and the Banking Securities Commission. These work thanks to the use of technological tools that facilitate the analysis of both personal and business data in order to provide an estimate of supply immediately. That is why the requirements they request are minimal and you can make your request from anywhere.
Each of the fintechs that exist handle their financial products in different ways, some can start their offer from 20 thousand to 2 million. In addition, another of the advantages they have is that most of the conditions do not imply having a guarantee or guarantee and they are more likely to adapt the credit to your business. That is, they can offer you high amounts with low interest and an estimated term according to your business and what you can pay.
The government, like the fintechs, is encouraging the growth of small and medium businesses. That is why there are certain programs that help entrepreneurs to obtain financing to improve their businesses. Some of them can offer up to 2 million and a half to be able to grow your business with a term of 5 years to pay it.
Here are certain pros and cons that you should analyze in depth. For example, if you agree to have such a long term to pay a loan of a medium amount, you may run the risk of having a higher level of debt than you could get with one of the two options above.
The seed capital is that amount that you can obtain thanks to the people closest to you, that is, your family or friends. Of course it’s a type of financing that you can get relatively easily and almost immediately. But here the amount you get varies a lot, besides the payment terms are low and according to the way in which each person agrees to lend you money.
But although you may think that this is an advantage, sometimes it ends up being the opposite. Since some inconvenience may occur generating friction or that some person wants to get a greater benefit in exchange for lending. That is, ask you for some extra compensation or in the last case a percentage of participation for the fact of helping to invest in your SME.
Venture capital is a type of financing that is possible thanks to investors who want to help in exchange for participation in the business. To obtain this type of investment, they need to see the potential of your business to grow. In addition to that it is very likely that they wish to help guiding you through tips and strategies so that you fulfill the goal of your project and it is something beneficial for both.
Thanks to this type of capital you can obtain approximately 500 thousand to 20 million and the payment conditions depend on the agreement they reach. A very important advice for this type of financing is that you must have very well valued the value of your company and all the financial management. That is, your income, expenses and the profit percentage that you are generating month after month.
Crowdfunding is a very innovative type of financing and works by collecting money collectively. You can find different online platforms that work under this scheme. In them you must upload a document in which you explain your business and the project you want to implement, in order to attract all those interested in lending money to achieve your goal.
The capital that you can obtain varies a lot since each investor that finds your project can contribute the amount you want, plus the time to gather everything you need in the same way is indefinite. The way to liquidate this type of loans is the same, through a term and interests fixed by investors.
Now that you can choose the financing to help your small or medium business grow, just decide to start applying. We recommend that you keep in mind how far you want to grow your business and under what actions.