Sources of financing for your venture

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Entrepreneurship in Mexico is difficult. Even if you have the best business idea and a foolproof value proposition, getting the resources you need to start your business can become a titanic task.

As a general rule, enterprises of any kind are almost always monopolized by those who have immediate access to their own investment capital, and it is very difficult for the rest of the people to access economic and fair financial products that allow them to start a business.

Among the economic concerns of the government, is the fact of promoting that banking institutions facilitate access to credit for entrepreneurs, however, the results have not been ideal and other financial alternatives are emerging as the best options for a Entrepreneurship is capitalized.

 

Today we will review the main sources of financing available and the advantages and disadvantages of each.

Bank loan

Bank loan

The bank loan can be a good alternative to obtain a mortgage loan for SMEs or to inject cash flow to businesses that have been operating for more than two years, since in both scenarios there is some type of guarantee to offer to the institution. However, bank loans for new businesses that do not have seniority or their own property are characterized by being very expensive and taking too long to resolve.

 

Government financing and competitions

The government and the different entities can provide through the National Institute of the Entrepreneur (INADEM) in-depth support for the creation of small and medium-sized enterprises that help boost education, health, innovation or culture, among other sources of social welfare

They are an excellent alternative if your project can be linked to some issue of well-being (innovation in medical technology, healthy foods, sources of employment in rural areas, etc.) because, if you show that you have used investment in the business, you don’t even have to return it. The disadvantage is that bureaucratic paperwork is very complex, since you have to prove the feasibility of the idea.

 

Triple “F”

money loan

From English Friend, family and fools (friends, family and fools), refers to the funding we have obtained in our closest social environment. It has the advantage that it does not tend to generate interest, but the huge disadvantage that the amount you can get and the payment options are usually not many, and the enmity you can gain by not having a perfectly clear investment and payment landscape, yes.

 

Venture capital and private capital

Both venture capital and private capital come from private investors or specialized entities that make “loans” in exchange for shares or shares of the company. The difference is that venture capital is focused on new companies with high growth potential, and private capital is injected into companies that have already demonstrated their viability so that they can expand further.

 

Crowfunding and incubators

financial loan

Crowfunding is a loan model between individuals designed so that a project, idea or business can be realized from various donations or loans. Crowfunding can be financial or non-financial, depending on the profit of the venture.

On the other hand, incubators are entities that provide advice and support in matters of financing, logistics and business plan to entrepreneurs, so that they have more opportunities to succeed.

 

Sofomes, leasing, leasing and factoring

Sofomes or Multiple Object Financial Societies (SOFOM) are private associations that offer loans and financial services such as leasing and factoring. In general, each sofome specializes in one or two types of financial products, so they are good alternatives to acquire machinery and obtain capital for the operation for those who do not have access to traditional banking. They are regulated by Condusef and their financing costs are accessible.

As you can see, if you have a good business idea, you also have many alternatives to fund it and start your project. Find out, compare and take advantage of free tools like Liritum to make the best decision.