The financing For businesses has changed in recent years because there has been a boom in non-banking alternatives. We give you more details about the new possibilities.
Financing for companies: forms of alternative financing
The forms of alternative financing they have multiplied and today traditional systems coexist with other innovative formulas. The reasons for this increase in non-bank financing have been twofold.
The first, the consequences of the Economic Crisis of 2008 regarding bank financing. Many financial institutions restricted credit to companies that were solvent or to projects based. The result is that other financing methods, some of them already old, increased.
Secondly, the emergence of the so-called fintech that offer financing through the network. The existence of Internet allows companies and investors to contact each other without the need for intermediaries
Do you want to know better the financing possibilities for your company? Let's review the forms of non-bank financing for profit:
He crowdlending has long become the main non-bank financing alternative. This system consists, in essence, of loans what are you offering private users to one company in exchange for receiving some interests which are usually greater than what a fixed term offers. This type of financing is also called P2P.
Crowdlending can be used to launch a company but also when you have specific financing needs. This is useful when the financial institution does not grant the loan. If you have a specific need for financing, this alternative may interest you.
Official Credit Institute (ICO)
He Official Credit Institute (ICO) is the principal public organization that finances business projects. Some Autonomous Communities have analogous organizations.
The main benefit of ICO credits is that they have a lower interest than that of financial entities. Of course, the project must be accredited. The truth is that this is an interesting alternative because the organization has already financed more than 900,000 companies. If you are clear about the project and can present a plan, you can consider this option.
It is important that we remind you that the ICO, unlike other formulas, has existed for several decades.
He participatory loan, unlike other formulas, is subject to company profits. This implies that, in the case of profits, the interest will be higher but, if there are losses, the lender could face negative interest. We are not going to deny that, for the lender, there is a potential risk that does not exist in other possibilities.
This type of loan, although it is not so common, is regulated by legislation. It is a good option for Projects that they begin their journey (startups). Typically, this option is assumed by investment funds. venture capital.
Issuance of debt or promissory notes
The issuance of debt or promissory notes It is a classic of the large companies. This system consists of guaranteeing the payment of the amount lent plus interest with a certain expiration. The interests are usually higher than those offered in the public debt market.
The issuance of debt or promissory notes is often used to pay for projects or to meet short-term capital needs. It is usual for large companies to make this type of emissions with some frequency. It is therefore an option of financing for companies that has been used and is used. This is one of the possibilities that small investors have to make savings profitable or seek security.
What happens with this system is that they can only do it big enterprises because they are the ones that generate confidence in small investors. It is also important to note that this method is regulated by the National Securities Market Commission (CMNV).
Alternative Stock Market (MAB)
He Alternative Stock Market (MAB) is another option financing for companies that exist. It basically consists of access to SMEs to the stock market. This is an interesting financing alternative for companies already in operation that can prove certain data to the CNMV.
The main advantage of this method is that there is a easy access to financing and public. Now, it must be taken into account that the requirement of transparency It is much older.
The shapes of financing for companies non-banking multiplied, so today you can avoid a bank not giving you a loan. There are different alternatives depending on the life of the company. Knowing how to choose wisely is essential to get the most out of these options.
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