There are various situations that can lead to the emergence of needs for financing for business. Whether it is to maintain the profitability of a business in a sustained manner over time or due to a lack of funds to open a business, companies that present this type of need require financial solutions for businesses, which will be described throughout this article.
Financial solutions for businesses
There are multiple financial solutions for businesses that can help the prosperity of your business. The business loans They are the conventional way that they use for their financing. However, this source of financing may have drawbacks related to the payment of high interest rates or slow response to whether the financial institution agrees to grant the loan.
However, you have the possibility to go to alternative funding sources, which help to avoid the disadvantages associated with loans and other banking options. In addition, these alternative forms of financing facilitate the creation of value throughout the life of the financial instrument in question.
Financing Methods for Retail Businesses
The stock financing, also known as inventory financing, is an option used, mostly, by companies that offer consumer products and by dealers. The goal pursued when undertaking inventory financing is to get liquidity from product stocks available to a given organization.
This financial tool consists of the following: The applicant company receives a inventory value loan object of financing and, as said stock is sold, the company will begin to return the money from the loan obtained.
The inventory financing It allows to energize the activities of the company, thanks to the mobilization of the money that it has in static in the form of stock of products. These stocks can be used and exploited as incredibly useful sources of resources for organizations.
He renting for companies is basically a rental of non-real estate. The lease period usually ranges from 2 to 5 years, without incorporating an option to purchase the asset at the end of said period.
Therefore, once the lease contract expires, the lessee is obliged to return the non-real estate, with the advantage that said entity You do not have to assume any type of maintenance or repair cost. The latter will occur as long as the object included in the rent has not been misused.
It should be noted that the funding obtained through the renting It is usually oriented to the medium and long term, in addition to constituting significant tax savings for businesses.
He crowdfunding for companies It is a type of financing consisting of a requesting person or business publishes their project through platforms available in Internet. Depending on the attractiveness or potential profitability of this project in the eyes of other people, the latter may carry out contributions to the project of the applicants.
The amount contributed by collaborators depends on each specific person (there is no pre-established figure). In consideration for the contribution made, the collaborators They do not receive monetary compensation. The rewards you can get are the following:
- Pre-purchase of the product related to the project.
- Special thanks on the applicant's website.
- Various privileges once product development is complete.
thanks to crowdfunding, businesses can obtain the capital they need for their development. Those responsible for the projects have the possibility of knowing if changes must be made prior to their launch. In addition, the use of a tool such as the internet guarantees that the financing obtained is fast and safe.
He crowdlending It is another of the non-banking options available to organizations. Crowdlending implies that private persons grant loans to other individuals or companies, since they consider that their projects can be interesting and profitable. Frequently, there is the existence of a platform that acts as an intermediary between the parties, and for this he receives a commission.
Between the potential benefits of crowdlending, there are the following:
- Thanks to the internet there is a great speed in the procedures.
- It does not require guarantees.
- It is possible to aspire to assume a greater amount of debt, since the Risk Information Center of the Bank of Spain (CIRBE) is not used.
- Applicants have enormous flexibility to repay the loans received.
In addition to bank loans, you have many other alternative formulas with which to meet the needs of your project or business. Through this article, we wanted to highlight those operations that are conformed as main business financial solutions.
At Alter Finance, we are specialists in the financing for businesses of the retail sector. If you require additional information on any of the financial formulas already described, contact us without obligation.