No funding from the bank? Tips for alternative funding!

No funding from the bank Tips for alternative funding

In the past, an entrepreneur went for this financing to the bank. Since the credit crisis, one in four applications from an SME was rejected. By contrast, the range of options for alternative funding is growing gigantically. In the first part, we gave ten tips for the search for alternative funding. In this edition the next ten.

Tip 1: Check the financier’s reliability

There are many funding options, such as family / friends, the municipality, the UWV or crowdfunding. The financier checks you for reliability, but do not forget to do that too! Find who the people are behind the business, look for reviews and experiences from others, try to figure out what happens if you’re unable to pay back on time. You are going to have an important relationship and you need to know who.

Tip 2: Take care of the collateral

It’s tempting to look at the interest rate only. But at least as important are the collateral that the financiers demand. Sometimes the company can provide enough collateral, sometimes a financier also asks for a collateral from the private sphere, such as a deposit or mortgage at your home. Take note of this, and try to avoid collateral from your private situation.

Tip 3: Read the terms and conditions

During the credit crunch, banks found that they could change terms of financing, or terminate funding immediately. Many entrepreneurs did not know, but banks referred to the small print. Do not fall into that trap and keep the terms and conditions, even with alternative funding. Do not be surprised.

Tip 4: Stack or not?

Nowadays, you can read about staple financing: combining various forms of financing. Actually nothing new, because you used to be a loan, lease and debtor at the same time. What is different is that it is now several parties that you combine. It can be beneficial because you get better funding, but remember that you’re married to several financiers right away, all of which can have their own reason to talk to you.

Tip 5: Compare various alternatives

Nowadays, there are more than one hundred different parties offering funding, but not a traditional bank. The advantage is that there are many possibilities. The disadvantage is that it is harder to choose. Therefore, it’s important before you make a comparison based on criteria that are important to you. The Chamber of Commerce is pleased to help entrepreneurs find alternative funding and charts the various possibilities and their features.

Tip 6: Look at the whole spectrum

Crowdfunding is now widely known, but there are many more alternative possibilities! Crowdfactoring, purchasing finance, supply chain finance, business angels, pre-financing of subsidies, import-export financing, independent leasing companies and so on. So be sure to get a good overview before making any choices.

Tip 7: Make use of government regulations

According to the Jong & Laan , not all entrepreneurs are aware of the different government regulations. For example, there is the BMKB scheme whereby the government guarantees a portion financed by the bank. This reduces the bank’s coverage deficit, enabling them to accept a request faster and provide better terms.

Tip 8: Is your product or service profited by broad fame?

Alternative financiers, such as crowdfunders, raise money with a wide audience. It also has added value next to the euro: that audience can also be your customer group. Make use of this. But keep in mind how your company is presented and on what platform. When choosing the crowdfunding platform you are going to use, Crowdfundmarktrecommends asking yourself, among other things, what form of crowdfunding and the associated platform is a good way to recruit future customers. The question is whether the expressions of a platform fit the goals of your company.

Tip 9: Are you eligible for a grant?

The Rijksdienst voor Ondernemende Nederland (RVO) indicates the possibilities for receiving a subsidy as an entrepreneur. Especially for entrepreneurs or entrepreneurs who are committed to research and development, there are excellent funding opportunities. Whether you qualify for a subsidy, you will find out with the RVO subsidy guide .

Tip 10: Do not forget your own funding sources

Although it seems increasingly easy to get alternative funding for your company, it should not be forgotten that a consideration is almost always required. Therefore, do not forget about your own possibilities. Your own company or yourself in private can be a source of funding. For example, are you able to increase the margins in your business or to expense costs? Great chance that you will be able to fill a large part of your needs without having to look for external financiers.

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