In the past, corporate financing was very simple. With the business idea, the founder could simply go to a bank to get seed capital. A prerequisite for the loan was a concept. If this was convincing, the start-up financing was approved quite easily.
The main thing to obtain a credit for business is that your company has the legal requirements that financial institutions request to start the process and thus evaluate the feasibility that exists to grant you the money.
In the list, you can find that they ask for documents that contain detailed information about you and your business. This in order to prove that your company is formal, that is, that it operates and is registered under the legal rules that the State establishes. You will also have to provide information on the finances of your business that demonstrate the flow of money and the debts that have been generated or possessed.
Increasing their chances of liquidity. Classic credit had a monopoly on medium-sized companies and startups. However, the capital market can be an alternative for startups, family businesses or medium-sized companies to find financing alternatives. The basic idea goes in different directions and is not necessarily associated with an IPO, but offers other variants.
SME bonds are becoming increasingly important in capital market financing, which is also evident on the stock exchange. In Germany in particular, they have now established themselves as a separate segment. Another capital market financing is provided by bonds, promissory notes or mezzanine financing. However, corporate financing will always consist of different options. The bank loan will not take a back seat, but will still be included. It is fundamentally important that the combination of financing instruments is optimally coordinated with the corporate strategy so that the financing alternatives can be fully developed.
An important aspect for companies is the level of awareness that can be achieved by financing on the capital market. The company benefits directly from the customer and also when recruiting new employees. However, transparency is an important prerequisite for being able to use financing from the capital market. Another component is communication with investors. Long-term goals are discussed in these discussions. It is important that the exit is considered right from the start. Because this creates a very special motivation to drive the company forward and to represent it more convincingly.
The exit options are quite different in nature. Not every option is possible or feasible for every company. It is worthwhile as a decision aid to take advantage of the loan offer.