Principal Alternative Financing Options For Your Company

A different project, a new product, or the expansion of the company: getting investments to finance an idea is not usually a simple task for those wishing to do so. In addition to convincing investors, it is necessary to negotiate securities and define a viable action plan. Know the options available, and make the best choice for your needs.

Best alternatives to finance your project

From private initiatives to public programs, there are many options for those who have a good idea but do not have the resources to put it into practice. Technology is responsible for creating new and different financing alternatives periodically. Know the main options below.

1. Bank credit

One of the most common strategies is to turn to your bank to understand the financing and loan proposals. If you have a good relationship with the manager and have a good reputation with the financial institution, it is possible to negotiate lower interests and more accessible conditions.

But don't skip on research: to attract customers, some banks usually grant favorable loan rates. However, remember to analyze the contract carefully and clarify all doubts about deadlines, interests, and conditions in general.

2. Government programs

The creation of programs aimed at entrepreneurs depends on the state policy of the country in question. The idea is to grant tax incentives, according to a specific criterion - company size and line of activity, for example - to boost the country's growth and job creation.

In general, the information can be obtained directly with the ministries of the federation and with the development banks that mediate the processes. It is a good alternative for those who have projects focused on areas of government interest.

3. Angel Investors

Angel investors are successful entrepreneurs with money to invest in new projects. The choice criterion is simple: lucrative potential. Aimed primarily at startups and technology companies, they are frequently requested.

To receive a vote of confidence and the money to execute the idea, you need to find your contacts with a business plan that demonstrates what you want to do with the money and explains how you will be able to make a profit.

4. Accelerator competitions

Catalysts of good projects, accelerators promote international skills to compare ideas, confront entrepreneurs, and reward the most prominent. In addition to promoting the winners by disclosing their names, brands, and projects, the accelerators invest money to finance your ideas.

5. Collective financing

Crowdfunding, one of the most recent financing alternatives, is a platform on which projects are supported by third parties. It is possible to donate small amounts of money to large amounts, with different benefits for each case.

Focused on innovative initiatives, these platforms value cultural and collective projects. The largest collective financing website in the world is Kickstarter, whose value has already exceeded the US $1.6 billion.

6. Financing companies

This can be best understood using the example of Affinity Beyond Capital, a US-based firm that provides short-term and long-term capital. They have a large portfolio of clients ranging from Small businesses to multi-million corporations. Businesses, especially, use them to seek loans for working capital.

7. Venture capital funds

Venture capital funds, also known as venture capital, are used for new business ideas. Companies seek to test products and projects before finalizing them. To procure this type of investment, the company must have a solid base already structured.

8. Defining criteria

Too many choices tends to make it difficult to choose an ideal financing model. That is why it is worth defining existing criteria and analyzing the options from the same perspective: make a list of priorities and determine what is essential for the execution of the project.

By placing what is most important on paper, it is easier to negotiate with investors and representatives of financial institutions. It is worth investigating all alternatives before closing any contract. It is a laborious and tedious process, but dedication can make a difference in the end.