How To Finance When Entrepreneurship Is On The Verge Of Crisis?

"Why did the capital flow suddenly become a problem?"

The owner of a feed company in Shandong suddenly complained to me.

Since the start of business last year, the work of training farmers, developing chains and internal construction has been thrived, but he has not noticed that the rapid development has brought too much pressure to the capital flow that the company has already perfected.

In fact, almost all entrepreneurs will encounter similar problems. Especially when they are on the verge of crisis, how to raise funds and use funds effectively becomes a difficult problem.

The financing strategy of entrepreneurs is clear, and entrepreneurs need to have a clear financing strategy before financing, especially those who are on the verge of crisis.

It is clear about the benefits and costs of financing.

The cost of capital is not enough. The more financing is, the better.

Only after thorough analysis is it necessary to consider financing when the total expected revenue from the raised funds is greater than the total cost of financing.

This is the first prerequisite for enterprises to make financing decisions.

As far as possible, enterprises should maintain control.

When enterprises finance, especially the crisis startups, they often lose part of their control and ownership.

This will not only cause profit diversion, but also directly affect the autonomy and independence of the production and operation of enterprises, which will cause huge losses to the interests of the original shareholders, and may even affect the short-term benefits and long-term development of the enterprises.

Corporate finance must ensure that funds are obtained to promote development, and to ensure the interests of entrepreneurs, so as to maintain a strong entrepreneurial passion.

We choose the financing way that is most conducive to enhancing the competitiveness of enterprises.

Enterprise financing needs to seek the best capital structure.

For example, for the term of financing, it can be divided into short-term financing and long-term financing.

The choice of the choice between the two ways of short-term financing and long-term financing depends mainly on the use of financing and the risk preference of the financiers.

It has become the practice of entrepreneurs to start up or tide over difficulties through financing.

There are two forms of financing commonly used by entrepreneurs: direct financing and indirect financing.

The so-called indirect financing mainly refers to bank loans.

Bank money is not easy to take, especially for entrepreneurs.

But there are exceptions in some cases, that is, if you get collateral or get a loan guarantee, the bank will be happy to lend it to you.

There are two types of bank loans suitable for Entrepreneurs: mortgage and secured loans.

In addition to indirect financing from bank loans, entrepreneurs also have many channels to obtain direct financing, such as equity financing, debt financing, corporate fund-raising, financial leasing and so on.

Equity financing refers to a way to obtain financing from the financial intermediaries through the pfer of corporate equity, such as obtaining financing through the sale of corporate stocks.

For entrepreneurs, venture capital is a common equity financing.

In China, there are many successful cases of venture capital in the Internet industry.

Debt financing refers to the financing way of debt collection by enterprises, and capital providers as creditors to recover principal and interest at maturity.

Private lending is one kind of debt financing.