Small and medium-sized companies as well as Spanish self-employed, until the beginning of the crisis, depended mostly on bank financing, causing many businesses to be forced to close their doors at that time. The main cause was the lack of liquidity suffered by companies to cope with situations of need that put the survival of the business at risk.
As a result of this unsustainability scenario, different alternative financing channels began to emerge, making possible a diversified financial strategy that provides greater security to the financial structure of companies and makes it possible to overcome situations of need and, in addition, enables the financing conditions of the business.
The financing strategy of a company is that set of actions taken by the entrepreneur in order to raise funds or funds to enable the development of different business projects.
It is a complicated and at the same time very diverse task from one company to another since a feature that will influence the composition of the portfolio will be the personality of the entrepreneur. According to the businessman personally, he will opt for more modern products or tend to the traditional. In addition, the magnitude of the project that is intended to develop will demand certain conditions that only with certain ways you can achieve.
Certain studies show that the design of this strategy is one of the biggest headaches for entrepreneurs since they feel the pressure to achieve what is necessary to carry out the development of the desired projects.
3 key points to develop a good financing strategy
To carry out a good financing strategy it is necessary that you first of all pause at the following points in order to make more effective financial decisions and your financial strategy is as effective as possible:
Delimits the needs of the project
Knowing your project well and defining the financing needs as much as possible, will allow you to know more accurately the amount with which to carry it out. It is very important to avoid over-financing, among other things, that the only thing they will generate is extra costs when financing you.
Analyze the environment and assess the different financial sources
Once you have defined needs, analyze the environment. Look at the different financial channels to which you can choose and try to incorporate the most suitable one. You need to analyze exhaustively to develop the most powerful strategy to cover the financing needs of your business.
Finally, choose the most appropriate ways
The roads, in the plural because the best way to build a robust and safe financial strategy is to compose it from both traditional and modern sources. The diversification of sources avoids many risks from the environment that could jeopardize the favorable evolution of your project.
Diversification in sources of financing? Why?
The diversification in financial sources or in fundraising in all cases is favorable because it allows the entrepreneur to have more capacity to react to situations of growth or opportunity that are presented to the company, as well as situations of need that have to face.
ADVANTAGES OF DIVERSIFYING
1. Origin of diverse funds
If the origin of funds is diverse, situations such as the crisis that began in 2007 and forced a multitude of SMEs to close their doors can be avoided. What happened ten years ago was unsustainable for the financial structure of SMEs, since by relying exclusively on bank financing, when this route had liquidity problems, it made it impossible for these companies to continue with their business activity, causing closure.
In addition, the ECB’s monetary policy decisions greatly change the country’s financial outlook, causing price volatilities …
If you diversify, you can count on funds at any time with the freedom to choose depending on the economic context in which your company develops looking for the most advantageous.
2. Greater possibility of financing
Thanks to the development of financial alternatives and the incorporation of them in the financing strategies of companies, it allows expanding the range of financing possibilities, both long and short.
Short- and long-term financing methods are emerging that are more suited to the context of interest rates in which the economy is located. If we are in an economic context where interest rates are bearish, it will be interesting to finance more in the short term by evaluating the different alternatives such as banking and others such as factoring or discounting invoices. If, on the other hand, we develop in a context of bullish types it will be more convenient to borrow in the long term since the price you set for your financing today will be lower in a few years, in these cases it will be convenient to value products such as crowdlending with the loans guaranteed by SGR that we only offer, MytripleA.
3. Increased ability to negotiate with suppliers
Each of the sources of financing involves a series of requirements and conditions that will make up your financial portfolio. The fact of building it in different ways will allow you to achieve financial conditions much more advantageous since your bargaining power with your financial providers will be higher than if you only finance in one way.
You will be able to observe and value the different “prices” of the financing, having the luxury of comparing them.
Based on the previous key points and therefore, to your defined needs more adapted to the development of your projects, you will be able to negotiate more with the financial providers getting a cleanup of the finances of your company.
Crowdlending as a perfect ally to diversify
With the digitalization of the financial sector and the increase in the needs for financing companies, crowdlending platforms are emerging that, in Spain, are gaining ground by leaps and bounds. They are platforms that connect financing with investment, providing more advantageous conditions on both sides of the coin.
In Spain, these types of platforms are booming because they allow SMEs, self-employed and Spanish entrepreneurs, to develop projects with better conditions.
If you need financing and you want to start diversifying, from MytripleA we make it easy for you. You just have to click here and benefit from everything we developed in this post and more. Request the loan via Purple $$$.