When a small or medium business needs a boost to be able to continue growing and achieve the projects that arise, it is good to know the SME financing sources that exist. But above all know which one to choose, because not all projects are of the same level or large scale. That is, there are projects that are very easy to capitalize and carry out.
That is why here we will tell you what are the types of financing in Mexico and how to choose the loan according to what you want to do.
Fund and savings of family and friends
This type of financing is the one that you can have more at hand and immediately, but the disadvantages are greater. Well, when you have to ask for money from people close to you and who initially trust in the use you will give them, there may come a time when the loan conditions change from one day to the next. That is, it is very common that they want to see more benefits than just having helped you carry out a project for your business.
Crowdfunding is a newer type of loan for certain very specific projects. Well, you need to register on a platform, present your project and wait for investors to contribute a certain amount. In return you would be paying their contribution monthly. In the end the liquidation process is the same as a traditional credit.
This could be an option that not many SME owners wish to use. Well, you receive a quantity in exchange for certain shares of your company, since the investors expect from your business that this money will actually double or triple favoring you loved parts. But do not be scared, the pressure is not so much, an advantage is that in addition to the capital, they offer a support to guide your project towards a correct planning and execution.
The government is interested in growing the economy in the country, therefore it has opened the doors for entrepreneurs to have access to SME financing. In the same way in this type of loans you must present your idea and based on that you will receive the support.
This is a type of credit that works in a traditional way, but has emerged thanks to the growth of SMEs. You must carry and physically request the entire process to obtain it. But here the disadvantage is that banks give preference to projects of more consolidated companies, that is, to large businesses and give an important weight to your credit history.
The Fintech are companies that use technology to improve the processes of requesting and granting SME financing. Many focus on facilitating access to credit for entrepreneurs and owners of small and medium enterprises, so they can boost their business. The advantage goes even beyond the ease of response, since the requirements they request are minimal. You can feel safe because although everything is through the internet, these institutions are regulated by both the Condusef and the National Banking Securities Commission and can also make offers as large as traditional banking.
But which one should you choose?
The first point to determine which one to choose is the size of the project you want to make. That is, there are projects that need a smaller amount than others. For example, through crowdfunding and the different platforms that operate in Mexico under this scheme, you can get up to 25,000 pesos. While with an SME financing from a Fintech you can get up to 3 million, that’s why you should choose the one that can offer you what you really need.
You may really need the money in the shortest possible time to continue production in your labors or cover a business offer with a new client. The best thing, in this case, is to approach the source that gives you an immediate answer about the credit. The Fintech have the facility to answer immediately, the traditional banking in a few months as well as a government loan. And with a crowdfounding or the help of people close to you could take even more.
Terms of the offer
As you can tell, these types of financing are distinguished mainly from where the money is obtained, so the conditions of the offer vary. You must choose the one that suits you and above all suits your business. For example, your business may be profitable but your way of managing it could stall it, so it is feasible that you request a venture capital in which business advice is included and is an extra backup. But if on the contrary you want to remain the owner of your business, any of the other types work. You should only compare the amount offered, the terms and interest.
Now that you know more about SME financing, you can make the decision that will make your business grow and improve. Discover in 10 minutes how much you can get from one of the best Fintech in Mexico and meet your goals.