Sources of Business Finance (IV)
Formulas for the purchase of goods
So far we have referred mainly to cases of lack of liquidity, but what formulas exist for the purchase of goods by the company? The loan is normally used, as well as leasing and renting.
In these cases it is gradually paying it in monthly installments. In addition, the lease will also be gradually paying VAT, which can be beneficial for the company, which, after the deadline, I can choose to purchase the property, renew or return.
In the lease there is also a continual renewal of the property acquired, so that it is continually adapted to new technologies and innovations that might affect you. The share of the lease includes not only the right to use the property, but also all the services necessary for their operation (insurance, spare parts, breakdowns, etc …).
According to José Luis Larríu, Caja Navarra, for their long-term investments mainly used Navarre companies financing “agreement as benefiting from the Official Credit Institute (ICO), which provide very favorable conditions.”
External funding for capital participation.
More and more common forms perhaps less “traditional” to obtain external financing such as venture capital firms or business angels. In the first case, it is corporations whose purpose is to take temporary stakes in the capital of enterprises In this way, by injecting cash contribution to the company and the venture capital firm has some control over business to participate in meetings of partners / shareholders and the board. In addition, it enters into a repurchase obligation of the interest acquired by the partners of the company within a specified period.
Navarre operating in several venture capital companies, which include Sodena, Start Up Capital Navarra, Clave Mayor, Venture Capital Source or Navarra.
Alongside these figures, each time taking a greater presence in Spain we find the business angels or so-called family offices. In both cases, the financier became part of the capital of the company. Thus, their input is configured as an equity contribution of not producing a financial imbalance in the company to increase · “what is” versus what “is.”
Unlike venture capitalists, business angels are individual investors, typically entrepreneurs or managers, they bring in a private capacity, not just money to finance business projects, but also their expertise and personal network.
Just as venture capitalists, business angels acquire a stake in the company to which finance it, and they normally do on a temporary basis with the goal of a return. But unlike venture capital, in the case of business angels there is personal involvement, individualized, direct a person with experience in the business world that will allow their contributions to growth and faster consolidation in the business in which it invests. It is therefore not only a form of financing, but also a tool or instrument for the implementation of business projects more ambitious and competitive.
Emerge thus known as “business angels networks,” entities that come into contact with potential investors and companies and entrepreneurs seeking funding, and they do making a selection of projects for each investor, providing detailed information on the various projects, maintaining the anonymity of the parties until the time of first contact and possible a formal framework for negotiation and trade between them.
The guarantee of having an experienced entrepreneur or manager to accompany the entrepreneur during the early years of your business project will contribute to the consolidation of new businesses and at the same time, strengthen their position in gaining access to other funding streams, as both financial institutions and venture capital firms or mutual guarantee perceive less risk in the project if it is backed by a business angel.
Navarre Chamber of Commerce and Industry, after a study of the various funding streams in Navarre, considers necessary and positive its implementation to cover or supplement the lack of funding for certain projects and to contribute to the competitiveness of enterprises Navarre by promoting networking and collaboration between business Navarre. Therefore, driving the creation of the first business angels network Navarra, which will be operational shortly.
Source: www.navactiva.com/es/documentacion/fuentes-de-financiacion-empresarial_34382
image source: http://processandprogress.com/wp-content/uploads/2008/04/finance.jpg