Businesses require just the right kind of funding to support them, depending on the situation. Growth companies often face the challenge of investing in growth but lacking funding. Well-established and well-established companies need financing for investments.
Seasonal fluctuations require support to balance cash flow in order to cover the monthly flow of business expenses. Increased payment times are also affecting the cash situation of more and more companies.
Applying for business credit is quick and easy and requires no real security
Fortunately, there are many different types of corporate finance services available to businesses. It’s a good idea to study the options carefully and think about which solution would best serve your company’s goals and objectives. Below you will find five different types of financing.
Business Limit – The most flexible business financing available to support day-to-day operations.
The most flexible corporate financing option for companies is a business limit. It is constantly at your disposal as a buffer for your daily needs.
The strength of a business line is its flexibility – it is well suited to short-term capital needs, such as balancing low-season cash flows and financing current expenses. The limit is also an excellent alternative for sudden acquisitions and, in some cases, for slightly larger investments.
Corporate loan – when you invest more at once
A business loan is a traditional loan, such as a monthly loan, which is used to finance a business. A customized corporate loan is a good choice if you want a straightforward one-time loan that you will repay within the repayment plan.
The Corporate Loan is particularly well suited for business start-ups and situations where a company needs more capital to finance an individual project.
Invoice Sales – When you want to cash your account quickly
Invoice sales mean that a company sells the desired amount of sales invoices to a finance company and immediately receives the money in its account. Selling your company invoices will get rid of due date controls, sending reminder notes, and debt collection, which takes time for business and customer work. So it’s a matter of flexible outsourcing of sales accounts – either for a single invoice or for a company-wide invoice.
By selling invoices, a company with a seasonally oriented and uneven order book is able to smooth out its cash flow. Sales of invoices also help with the cash flow challenges of extended payment periods. At the same time, financing planning becomes easier and the risk of credit losses is reduced.
Today, invoice sales are already very common. Particularly in sectors with high seasonal fluctuations – such as construction, metals, and machinery – invoice sales are well established.
When you want to balance cash flow and streamline your sales balance
Factoring simply means that a company obtains credit from a financial institution against its trade receivables. This allows the company to improve its liquidity and even out its cash flow in seasonal fluctuations. Factoring can also help a company streamline its accounts payable management.
The popularity of factoring has grown steadily – and not without reason. Factoring is suitable for companies with regular and consistent invoicing. In Factoring, the company chooses how much funding to use at any given time.
Public funding and other forms of financing
There are also financing options provided by public bodies, particularly for product development, export support, and internationalization. Business Finland supports product development and innovation activities. It provides funding for research, product development, piloting and a wide range of business development needs, especially for small and medium-sized businesses.
Finnvera provides financing for the internationalization of the company, as well as for export promotion and protection against export risks.
Today, it is also possible to obtain funding through crowdfunding. The basic idea is to raise the desired amount of money from a wide range of investors for growth and business development.