Knowing each type helps the entrepreneur to recognize which is the right product according to the stage in which it is since otherwise the financing could become priceless or hinder the operation instead of accelerating it.
Capital is essential for any business, but we must not forget that the entrepreneur must also devote time to development, and preferably betting on a priority economic sector for the country that has a minimal impact on the environment since these are the projects that attract more investments.
Know the ways in which an entrepreneur can obtain financing and which is appropriate according to the level at which the project or business is located:
The first source of financing is the one invested by the same entrepreneur, or the one coming from what is known as FFF: Friends, Family, and fools. This capital is used for the constitution of the company itself since it occurs when the entrepreneur starts the business and family and friends are the main sources of money to operate.
- Government Funds:
These instruments are used to generate business models and project development that is when it is more advanced than a simple idea. They are also used to create prototypes that help market the product or service in the market, so they usually give competitive advantages.
- Seed capital:
This loan is defined as the amount of money needed to implement a company and finance key activities in the process of initiating and implementing a project. It occurs when the company is already incorporated and has some important product, but requires money to operate or for working capital. It can also be used for market studies, feasibility level, business plan, and launches. The SE gives them, local governments and the Secretariat of Economic Development
- Bank financing:
In which companies can go for working capital or have flow in the daily operation of the business. In addition to commercial banking, there are options that can help you, as well as companies dedicated to financial factoring. The important thing is to compare the products and bet on the one that best suits your personal needs.