Financing For Entrepreneurs

Posted by Antoine in News | Comments Off on Financing For Entrepreneurs

One of the most establishments for any person who wants to start a business is financial. Starting a business costs money, and often the need for liquidity is higher than the cash available to the individual entrepreneur. The entrepreneur can have some help through economic promotion institutes of the Autonomous Communities, which can materialize in grants or soft loans (at very low interest or even zero) in many municipalities have incubators that provide an infrastructure to new entrepreneurs (office, phone, fax, Internet), to a very low or zero cost, however, all such aid, even when well, are often not sufficient, or do not work for certain businesses. And in any case, the entrepreneur must have a monetary cushion with which to meet their payments, while your company does not begin to generate an adequate income. Today, bank finance is difficult for everyone, but it can be mission impossible for someone who is starting. Even so, chances are, if the credit applications processed with the support of a Mutual Guarantee Society, which can provide a guarantee to the small business to the financial institution, facilitating the obtaining of the loan. Other forms of financing are very common for calls beginning are the two F’s, that would be family and friends (Family & Friends). That is, to borrow from those who appreciate us.

To do this, it is good to ask once you depleted their own capital, to see that you are committed to the project. One advantage of this source of funding is often not going to want interest, nor will urge the entrepreneur to get their money back in a short period of time. However, it is also true that many friendships and family relationships have been ruined by money, so beware. There is who adds a third F, corresponding to the English word Fool (= idiot), which would be those people who are cheats to get money, but this way, logically, is less desirable. A less known and it works quite well in certain businesses is the figure of which are private investors who either individually or through a network of investors, injecting money into a society that is starting or consolidating their model business. IESE Business School has a network of business angels, who analyzed about fifty projects per year.

Each entrepreneur has ten minutes to capture the interest of these investors for their project, and the average investment is usually between 100,000 and 300,000 euros. The most common sectors where capital is injected into the programming, biotechnology and the Internet. The business angel is usually invest in the capital of the company, and therefore his is a long-term contribution, which expects to recover through the profits generated by it, ie it does not deal in speculative plan, but attempt to do so in a period of at least five years. Figure of business angel takes relatively little time working in Spain, but in other countries like the U.S., Britain or Germany for decades, and have an attractive tax (less 20% of invested companies). Perhaps the empowerment of such investors would be an interesting aspect to be considered by our politicians.

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