FinancingFinancing is the action and effect of financing (contribute money for a company or project, defray the expenses of a work or activity). Financing consists of providing money and resources for the acquisition of goods or services. It is common for financing to be channeled through credits or loans (who receives the money, must return it in the future).

For example: “Unfortunately, we depend on financing to open a new store on the coast”, “Thanks to the financing from Banco de Crédito, we have been able to acquire new machinery and improve our production”, “I have an interesting project to manufacture shirts at low cost, but I need funding to carry it out”.

According to the term of expiration, it is possible to distinguish two types of financing: short term (when the maximum period of time to make the refund of the money is less than one year); long-term (There is more than a one-year term to return the money, or there is no such obligation, as when financing is made with own funds). Let’s see some examples: “We are studying various short-term financing alternatives since we do not want to get into debt for long periods”, “The businessman intends to install a new industrial plant in the city, but for that he requires a long-term financing plan”.

Another financing classification can be made taking into account the origin of the resources. The external financing is one that comes from investors who do not belong to the business (bank financing, the issuance of bonds, etc.), while the internal financing It has its origin in funds produced by the company itself through its activity (amortizations, reserves, etc.).

FinancingIt is important to bear in mind that the type of financing to choose for a draft Determined depends on various factors, such as the urgency to carry it out, the requirements of the source, the time in which it is estimated that it will be possible to return the money, and the volume of resources necessary for the start-up. Today there are many options, some of which are listed below:

Bank financing: This is one of the most difficult paths for entrepreneurs, given that among the banks’ requirements is that the project be highly solvent, that it is an idea that they have had success in the past and provided with an extremely detailed analysis of each phase in which their money will be used, as well as the plans for its return. Why, then, is it still one of the main alternatives? Because the process is fast and many consider it reliable;

Friends, acquaintances and family: At first glance, it seems like a foolproof method. But, given that they are the closest people to an entrepreneur, there are various situations that can put their relationships at risk, such as delayed repayment, or that loans be too much discreet. Why attempt against interpersonal ties if there are other means of obtaining financing? Because among the people around us there are usually one or two who support us unconditionally, and who would not allow a debt to ruin our friendship;

Crowdfunding: Without a doubt, this option is very popular today, mainly due to the success that certain entrepreneurs have obtained through platforms such as Kickstarter and Lánzanos. The process It is relatively simple: after registering in the crowdfunding portal, we upload a description of our project, along with a video and with details of the rewards that the sponsors will receive, and we wait for approval. To get good results, it is essential to do a lot of advertising on social media. What is your weak point? The lack of structure, since it does not differ much from a verbal agreement.