Types of Financingby Admin | August 30, 2021
What is an Alternative financing?
I'm sure you're already aware of some of the different ways companies can get the financing they need to grow their business on a daily basis.
What many people don't yet know is how new forms of business financing are emerging. Without realizing it, we have gone from a traditional method of financing to a much newer one such as alternative financing.
Very simply, we can summarize it as The financing of the future, because everything changes and so does the way of lending money.
Let's say that alternative financing has come to solve the shortcomings that the traditional way exposed to its customers.
In a more innovative way thanks to technology, this new form of financing makes the whole process of obtaining liquid a much faster system, easier for the user and above all transparent.
That is, fast, because thanks to the online form, the long processes of verification of documents, printing and management costs are over, reducing costs for the user. It is also easy, because technology makes our life much simpler with a single click or a call from our own home. And transparent, of course, because there are no more long terms and conditions, what you see is what you pay, without hidden commissions that usually appear in traditional processes due to the lack of flexibility that a non-technological and archaic system implies.
For all these reasons and many others that we will be discovering, why not try the financing of the future and leave the problems behind?
Types of Alternative Financing
Crowdfunding allows activities to be financed through a collective network, leaving banks aside.
Who receives the funding? Projects of one or more individuals or start-ups.
Who provides the funding? A community, group of people, whether professional or not, through collective cooperation.
Compensation Donations are solicited in exchange for financial or product compensation.
Time to get the funding? Normally the time that a campaign is usually exposed is between 1 and 30 days.
Mostly technological projects are financed, such as the drone company Hemav, which raised $450,000 in just six days.
Who receives the funding? It is usually directed to an entrepreneur, startup or medium-sized company.
Who provides the funding? Professional investors interested because it is a type of investment to which they did not have access before.
Compensation Shares in the company or project being financed.
Time to obtain the financing From 1 to 30 days.
These are activities financed through a collective network, which can leave banks out of the picture.
Who receives the financing? Small projects of all kinds. Both individuals and companies.
Who provides the financing? Among other companies or between individuals.
Economic compensation, through a fixed interest rate already agreed. This is obligatorily repaid following a payment schedule.
Time to obtain financing From 3 days to 2 weeks.
Invoice discounting is the discounting of invoices and/or promissory notes. To get an idea, it is what we already know as traditional factoring, but now enhanced by technology and focused purely on the user.
Who receives the financing? Companies that need to advance payment to their customers, usually SMEs. It is the fastest of all. It is one of the best methods for SMEs, as financing is provided much more quickly and easily.
Who provides the financing? Other companies or individual investors.
Economic compensation, in the form of an interest rate already established and agreed.
Time to obtain financing Between 24 and 72 hours.
It is important to know these sectors to know how alternative financing is formed from the beginning. Within the financial world there are different tools that companies use to achieve economic stability in their company.