You have founded a company and are now dealing with the question of raising investments? Here you can find out more about the ways of corporate financing.
The different ways of corporate financing
Nowadays there are many options to get financial support for the start-up or in the further development process. It is important that you choose the path that suits you and your company.
Online financing portals
Many entrepreneurs use the option of online loans, especially if their own house bank has rejected a previous application. Online portals with their low security requirements are particularly attractive for financing sums of less than 100,000 euros. This flexibility allows many companies to take advantage of such a service. The range of providers is also so large that you can often easily compare the different conditions with just a few clicks.
Second house bank
If you don’t really trust such online portals, you can get financing from several banks at the same time. Sufficient collateral must be available here to satisfy all banks, but this also minimizes dependency, which is why many entrepreneurs also choose this step towards corporate financing.
Funding
In principle, however, many federal states and municipalities also offer help with the financing of small and medium-sized companies. In Germany there are more than 1,700 different funding programs with different requirements on this basis. The KfW, in particular, but also the EiB within Europe and many agricultural pension banks are very well represented. In addition, citizenship banks and special development banks in the individual countries also offer this type of financing.
leasing
Another way that many entrepreneurs pay little attention to at first is financing in the form of leasing. Instead of spending a lot of capital on machines, vehicle fleets or office equipment at the beginning, it sometimes makes more sense to borrow a monthly fee. Since this step does not change the company’s equity, it is completely unproblematic for most companies to sign leasing contracts. At the same time, the leasing installments can be deducted from tax as business expenses. This balance sheet neutrality and the saving of costs in particular protect the liquidity of companies that are still young or have weak sales.
Factoring
Factoring is a rather unknown option for corporate financing. In factoring, which is particularly practiced in the management of current assets, a third party joins the dealer and supplier on board. If the retailer has difficulty paying the outstanding invoice amount, the factor usually pays 80 to 90 percent of the costs by settling the receivables immediately. In contrast, such a factor ultimately demands additional fees and interest from the debtor when repaying the cost assumption.
Advice on corporate financing on Projektify
There are of course many other corporate finance options. We at Projektify also started small and therefore decided to support you with this decision in the form of advice. Especially for this we have created a service that you here can use. But that’s not the only thing. If you have even more questions, such as legal or tax issues, you can also use our other services. It’s this way for that!
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