Business
How To Finance Your Growth With Growth Funding?
If you want to finance the growth of your business, several types of financing can be mobilized: capital increase, honor loan, bank loan, operating subsidies, short-term financing, etc. Some must be favored according to needs. In all cases, diversifying sources will have the advantage of optimizing financing conditions, but also reducing risks and activating the leverage effect. Indeed, a Business Account Manager in a bank must ensure the company’s ability to meet its financial commitments.
He will therefore check that the funding requested targets a clearly identified need or development project and that the prospects presented respect healthy financial balances. A business plan, an executive summary of this business plan, and a 3-year financial forecast must therefore complete the application. It is also essential to properly quantify the need for financing, but also the repayment capacity of your company. When an entrepreneur provides this evaluation work by linking it to the results of his company, the correlation between the two reassures the banker.
The most effective method to get funded is adapting growth funding resources. If you want to make investments, under certain conditions you can get a loan for your business as a growth fund. Companies that want to grow need a solid foundation. Therefore, first devoting oneself to development is essential for the successful implementation of growth plans. If essential steps of the development phase are obscured by excessive growth euphoria, there is a risk of a crash landing. It is therefore important that, in the first step, companies are clear about which financing options are actually suitable for growth plans – and which are not.
Process of Growth Funding
Markets and companies continue to develop, new potentials are discovered, and ideas are in demand and want to be realized. Being able to seize market opportunities is an important basis for being able to grow successfully. But one engine is seldom enough for successful progress.
This applies to both corporate strategy and corporate financing. Anyone who relies solely on the traditional sources of finance equity and credit leaves important potential untapped – especially when quick strategic decisions focus on fast and tailor-made financing.
An effective and safe growth financing that is tailored to your needs, does not come today, and more often from a bank. In the following, we will shed light on the topic and introduce you to bank-independent solutions. A change has taken place in the area of growth financing in particular, which offers you new opportunities to move your company forward efficiently and quickly.
Finance the growth of your business requires adapted financing methods and solutions consistent with your projects.
- The development of my company’s activity and its economic and environmental performance requires investments in capacity or productivity.
- Increasing its market share goes through external growth operations, by buying one or more competing companies. These acquisitions should accelerate the growth of my company, by gaining faster access to technologies, innovations, distribution channels, and customers that I do not currently control.
- My company’s turnover is too concentrated on the national market. International development is one of the pillars of the growth strategy.
- The financial management of my company, built up over time, deserves to be rethought and organized differently. Funding, in the short, medium, or long term, must be adapted to my current and future needs and shared with partners who are committed to my side.
- What financial engineering should be implemented to optimize the financing of my projects?
- What financing firms can provide the funds when my company needs them? There are several trusted financing companies – such as MARS Capital, which provides the funding from $3 million to $100 million.
Financing for business growth
Well-prepared financial planning is the foundation of any business growth strategy. Firstly, you should establish:
- How much investment you will need to fund the growth
- When you will need it
- When it will be available
- How soon you will be able to repay the capital
It’s important to detail all the costs incurred in getting your growth option underway and compare them against the anticipated profits. You must be realistic and practical when setting business growth objectives. Here are some good options to get funded for the growth of your company.
Liquidity
Liquidity is a company’s ability to raise cash when it needs it. Liquidity is a measure of a company’s ability to pay off its short-term liabilities—those that will come due in less than a year. It’s usually shown as a ratio or a percentage of what the company owes against what it owns.
These measures can give you a glimpse into the financial health of the business. Companies use assets to run their business, manufacture items, or create value in other ways. Assets can include things like equipment or intellectual property. Inventory, or the products a company sells to generate revenue, is usually considered a current asset because generally it will be sold within a year. For an asset to be considered liquid, it needs to have an established market with multiple interested buyers. Also, the asset must have the ability to transfer ownership easily and quickly.
Structured finance
Bank loans remain the most obvious and simplest resource to implement. Based on the business plan drawn up, structured financing makes it possible to profile the lines of credit automation as closely as possible to your current and future needs. In addition, it federates in a sustainable way a circle of banking partners that you have chosen and who support the growth of your business over time.
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