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How to finance my company: with loans or investors?

Inform yourself about the way in which you should request capital for your business and the recommended actions within the process, it is essential so that your company can grow the percentage you expect. The search for loans or investors seems easy, but the truth is that it is a fairly complex process that will require your full-time attention and management. How to finance my company? Here we will tell you.

It is recommended that you have information to help you clarify the differences between both financing options, as well as the advantages and disadvantages of each activity.

On the other hand, you must be clear about the accounting of your own company, since a company that is just starting out will probably need a different amount of money than a company that is already developed but wants to further expand its operations. Horizons. Learn all about how to finance my company.

Should I look for investors?

The first step in looking for an investor is to make a business plan that allows you to persuade them.

One of the common mistakes among small and medium-sized companies is precisely to ignore this step, but it is not enough to have a business plan just in your head, but you must keep it in writing and with an understandable structure so that you can deliver it to your clients. Future investors.

Any financing agent will be attracted by a business plan that demonstrates clear, innovative and viable ideas.

With respect to the above, you should also consider covering all the important aspects in your business plan, that is, products, services, strategies and purpose of the company. Your future investor will pay special attention to the accounting part, so your accountant will be of great importance to present your finances clearly and accurately.

In addition, having an accountant will help you make strategic decisions regarding your business, since, with the help of detailed figures and reports about your company, you will be able to generate an attractive plan that allows you to finance your ideas.

Next Step

That said, the next step is to consider that there are different types of investors and that before closing a deal with the first one that offers you good numbers, you should ask yourself what your needs are.

As we mentioned at the beginning: is your company about to start activities? Has it been running for a couple of years? How much would you like to boost its growth? These are some of the questions you should review when looking for investors.

On the other hand, it is worth advising you to pay special attention to the wide range of investors that you find in the market today. Remember that your investment will not necessarily be a person, but it can perfectly be a university that works as an incubator, for example.

Can I apply for a loan?

Unlike the process to get investors, getting capital through a business loan can solve your problem much faster and with short, medium and long-term payment. In addition, this process would allow your production cycle to be strengthened and, with it, the credit history of your company. A solution on how to finance my company.

Considering the above, it is always advisable to seek information on all the credit alternatives offered by the market, since the conditions and interests of the type of financing they offer you will change depending on the financial institution with which you decide to close the deal. However, they can never violate the laws that regulate such operations.

You can opt for the following variety of credits:

  1. Consumer Credits

This type of credit refers to an amount that a bank will lend to a person who wants to purchase goods or pay for certain services. It is generally paid in the short or medium term, with an average of 1 to 5 years.

You can find various entities willing to offer you this type of credit and you can also agree on the extension of the payment of the first installment, as long as the institution allows it.

  1. Commercial Credits

Commercial credits are loans that have been designed to meet the capital needs of companies, including the purchase of goods and the payment of services for their operation.

The main difference that you will find between this type of loan and consumer loans is that the amount requested by companies is usually higher, therefore, the bank will request your income and expense flows.

Their payment is usually agreed from 1 to 5 years and they will also allow you to modify the installment payment term, depending on the objective you have.

  1. Mortgage Credits

The purpose of this type of loan corresponds to the purchase of a property, be it a home, an office, land or even a commercial premises.

The main difference with the other loans that we detail is that the payment term is notoriously longer, since it ranges from 20 to 40 years.

The most important thing is that you consider that the bank will only give you up to 80% of the value of the property, so you will need to have capital saved for the foot and administrative procedures.

Other aspects that the bank will look at is your credit history, on the one hand (that you have good management of your credit cards) and finally, your income; key aspect to demonstrate that you have the ability to pay.

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