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Published byCharlotte Gaines Modified over 6 years ago
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Funding Your Business From the moment the capital needed to start the activity is known, the following question arises: "Where to find it?" This is where the financing map comes into play, an instrument that defines the sources of financing: equity, loans or credits, institutional incentives, etc.
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Financing map Where to get the capital needed to finance the initial investment and the spending during the first months of activity? Financing the company is the amount of capital needed to meet the starting and operating expenses. The entrepreneur should be aware not only of the existing and available financing mechanisms, but also the best financing strategy given the nature and size of the business, as well as the ability of the future company to meet its financial obligations. The entrepreneur should be concerned not only with obtaining financing but also with obtaining the one that offers a payment plan that is more adequate to your needs and abilities and that allows you to ensure a sustainable financing structure in the medium and long term. There are two main sources:
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Financing map Own Financing
The one supported by the partners of the company. It is necessary to draw the attention of potential entrepreneurs, that although it is possible to use various forms of financing external to the company, it will always be essential that the entrepreneurs participate in the financing of the initial investment with some capital, for several reasons: The first one has to do with the good financial health of the company. In order to guarantee a good financial autonomy, that is to say, a financing structure that guarantees to the entrepreneur that will not have difficulty in ensuring the fulfillment of its commitments, it is necessary that a good percentage relation between the own capital and the assets of the company For the credibility of your project with potential financiers – you should “put your money where your mouth is”!
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Financing map External Financing
It means getting the funds from sources outside the company. There are several: - Family and friends: - Awards and competitions; Microcredit; Crowdfunding; - Business Angels; - Venture capital; European funds.
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