Financing is the action and effect of financing (provide money for a company or project, cover the costs of a work or activity). The financing consists in contributing money and resources for the acquisition of goods or services . It is common for financing to be channeled through credits or loans (Whoever 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 of 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 financing to be able 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 return the money is less than one year); long-term (There is more than one year to return the money, or there is no such obligation, as when the financing is carried out with own funds). Let's see some examples: "We are studying various short-term financing alternatives since we do not want to borrow for long periods", "The entrepreneur intends to install a new industrial plant in the city, but for that it requires a long-term financing plan".
Another classification of financing can be made taking into account the source of the resources. The external financing is one that comes from investors who do not belong to the company (bank financing, issuance of obligations, etc.), while the internal financing It originates from funds produced by the company itself through its activity (amortizations, reserves, etc.).
It is important to keep 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 demands 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 implementation. There are currently many options, some of which are listed below:
Bank financing: This is one of the most difficult paths for entrepreneurs, since among the requirements of the banks is that the project is highly solvent, that it is an idea that has had success in the past and that they are given an extremely detailed analysis of each phase in which their money will be used, as well as the plans for their 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 an infallible method. But, given that they are the closest beings to an entrepreneur, there are several situations that can put their relationships at risk, such as the delay in return, or that loans be too much discreet. Why threaten interpersonal ties if there are other ways to get 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 because of the success that certain entrepreneurs have obtained through platforms such as Kickstarter and Lanzanos. He process It is relatively simple: after registering on the crowdfunding portal, we upload a description of our project, along with a video and with the details of the rewards that the sponsors will receive, and we hope to receive approval. To get good results, it is essential to do a lot of advertising on social networks. What is your weak point? The lack of structure, since it does not differ much from a word agreement.