Financing for companies
Companies need financing, that is someone lo lend money to face expenses, either to have more liquid funds or to invest in new projects.
Financing is currently the main problem for different companies, which very often have to see how their liquidity problems stop the start-up of new commercial projects. In fact, is quite usual to find companies that must close because they cannot pay short term payments, even when they are certain of having future incomes, since it is difficult to find someone to give the money in advance.
Looking for financing, these days, is one of the most difficult tasks company managers have to carry out. There are several solutions they may find:
- ICO Line: the Official Credit Institute (ICO) is a public institution attached to the Ministry of Economy, which is giving loans to finance different company transactions since 1971. There are two ways of carrying out his financing: through mediation lines or in a direct way. Lines of finance are the base on which financial entities must follow when they are going to give credit to companies, being ICO the one to determine the amount, interests, repayment terms, and being the bank or savings bank the one approving or rejecting small and medium-sized companies' applications. Direct financing focuses on particular large scale projects, given than they have to exceed 10 million Euros, with very long term repayments.
- ENISA: this is a public company which mission is to give financial support to innovative projects and to entrepreneurs, in which there is an elevated risk.
- Financial entities: besides processing or even improving the ICO lines of financing, banks and saving banks offer credit accounts to companies, either to finance their working capital or their investments.
- Angel business: this is a new trend in the financial market, people who have big capital available and puts it at the service of companies which they think are adequate because of their business opportunities. In exchange for financing, the “angel” will own the equivalent part of the company shareholder. They meet the needs of financing that close circles such as family and friends cannot reach, and they do not lower big investment funds since they are limited quantities.
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