financing levers for your business

Financing your business is an important step in growing your business. However, depending on the age of your company and your needs, financing sources can vary. Let’s take a look at the financing options best suited to your needs.

Financing business creation

Let’s start at the beginning: financing the start of your project. There are several financing solutions adapted to the launch of your business.

Love money

Love money refers to the money your loved ones, friends, and family lend you to finance your business. Typically, money lent by loved ones is used to build your equity and finance your initial needs. It can also be used in the case of a capital increase to strengthen your equity. Love money is therefore ideal for strengthening your equity and financing your initial needs.

Grants

With a grant, you do not have to repay the amount awarded to you. Among the best-known grants are grants from BPI France or regional grants.

Honor loans

An honorary loan is a loan granted to you as a manager, not directly to your company. This loan is interest-free and unsecured, and the amount granted varies depending on the organization (Initiative France and Réseau Entreprendre are the two main ones).

These types of financing are excellent ways to fund your business without capital. They also allow you to test the reliability of your project since they are reviewed by a panel of judges.

However, they are often coupled with bank financing (ultimately, they strengthen your equity and obtain more substantial financing) and certain criteria must be met to benefit from them.

Crowdfunding

Crowdfunding is an alternative financing method that allows you to finance your project through the “crowd.” Everything takes place on online platforms, and all types of projects can be funded. This source of funding is ideal if you don’t want to go through more traditional financing channels. It’s also a great way to test your product and introduce it to your market.

However, you’re not guaranteed to raise the necessary funds for your project. Now that you know how to finance the start-up of your business, let’s move on to its development.

Financing your working capital requirement (WCR)

Depending on your business, you may have cash flow gaps to finance. This is called working capital.

There are two main ways to finance this need.

Banks

To finance your working capital, banks offer you a variety of short-term financing options . There are many. Among the most well-known are overdrafts, factoring, discounting, and Treasury bills. These are financing options with a term of less than one year that meet your cash flow needs.

Fintechs

Fintechs also offer short-term financing solutions. Their main advantage lies in the speed and simplicity of the experience. Solutions like Defacto even connect directly to your accounting tools to offer financing solutions for your invoices.

This allows them to be much faster in granting financing (compared to the average 3-month process with a bank) and much more flexible (no minimum balance with 100% flexible repayment).