New ways of financing a company
The most used types of loans for companies, according to data from September 2017, were loans to suppliers, which accounted for 32.8% of total financing products for SMEs , credit lines (20.8% ), the loan for banking companies (19%) and the finance lease (9.6%). However, it was the new types of loans that, according to the SGR-Cesgar study, have received the best valuations.
What is factoring ?
It is a new way for SMEs to finance themselves. It is a new alternative to pay the bills of one or more providers later , with the bank paying the provider. The bank will then charge us either in full or in monthly installments the cost of said invoice along with the interest generated.
What is the confirming ?
The confirming , also called cession of payments to suppliers, allows us to charge an order in advance. In other words, when one of our clients orders us we can request a confirmation so that the bank will pay us before delivering the order to our client and thus reimburse the capital when our client pays us.
What is renting ?
Technically speaking it is a rental contract on some physical property. Although its biggest market in vehicles, it can also be used for machinery, for example. The renting consists of a way that the company has to be able to obtain the necessary goods for the development of its activity. The main characteristic is that the contract must be longer than one year, the rent will be paid in installments and there will be no purchase option at the end of the contract.
What is leasing ?
Last, but not least, we find the lease or also known as financial lease. It is a financing option very similar to renting , but its biggest difference is that the purchase option is mandatory at the end of the contract.
As we can see, although not all of these options are exclusive for companies and SMEs, they do offer advantages that self-employed and small businesses can take advantage of in order to grow their business not only by hiring loans for traditional companies. It is not surprising that now that these alternatives have become popular, they have positioned themselves as the most valued by self-employed workers.