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Traditional sources of financing business such as bank loans pose a challenge to small and medium businesses. In particular, innovative, new, and fast growing enterprises with higher risk profiles can’t get the funds they need from conventional sources.  The same is the case for firms in transition like those in the process of changing ownership or control.

Every business needs funding at different stages such as when starting, embarking on a new project, during expansion or when finding its footing following losses. External financing in the form of just right loans is the most suitable means of achieving these objectives. In fact, external financing is essential to start, meet operating expenses such as payroll and inventory, and to grow the business.

Challenges of obtaining a bank loan for enterprises

Financing is a major hurdle facing most enterprises. Yet, many entrepreneurs are intimidated by the prospect of obtaining funds from the traditional sources, especially the banks. This is because these institutions set high lending standards which few enterprises can meet.

The situation is such that it is difficult for small businesses to find, request for, and obtain financing. Most financial experts think that this problem stems from the fact that most enterprises don’t take time to prepare for the process. They say that the issues around bank loans can be sorted out through due diligence.

This means that entrepreneurs looking to obtain external financing must have all the necessary documents needed by the lenders. This may work for established business. However, the problem remains for innovative, newer, and fast growing enterprises with higher risk profiles.

Alternative sources of Entrepreneurship Financing

To overcome the challenge of obtaining financing from conventional sources, many entrepreneurs are exploring new approaches to funding. This means that the most successful entrepreneurs are the ones who think outside the box. They think creatively about what they have to offer and also how to secure funding.

They know relationships are the key to securing funding, so the develop quality networks. Their approach is to sell themselves, more than what they have to offer, to secure all alternative sources of financing. Also, they remain open minded and never rule out any approach.

Some of the top new approaches include-

Personal financing

The most successful entrepreneurs use their own resources to start the business. They save money over time and grow a fund they can use to start the venture. They also know that no investor will finance a deal where the entrepreneur has no financial stake in it. Personal financing is necessary to get the idea off the ground.

Personal credit lines

Credit cards come to the rescue of many small businesses. They are easy to get because they don’t need a lot of credit history. In fact, there are many startups that have used this approach. The main benefit is that the entrepreneur retains complete control and ownership while meeting the minimum payments.

IRA financing

The Investment Retirement Account monies and 401k’s are among the most accessible alternative financing sources for new businesses today. An entrepreneur can easily find many people willing to loan them money from their funds for the right terms. However, the entrepreneur must sell themselves and their idea to the lenders.

Microloans

There are private lenders and non-profit organizations that offer small business loans. These can be useful to entrepreneurs who can’t qualify for bank loans. Also, they are suitable for micro business.

Online lenders are useful for entrepreneurs who lack collateral, need financing quickly and lack a track record.

Crowdfunding

The internet has revolutionized the way many things are done including business funding. Now entrepreneurs can find a group of likeminded people who can back their businesses through small contributions. This approach is evolving beyond non-profits and will soon include small equity investments.

Peer to peer financing

In this approach, a group of peers comes together to help each other financially. This approach can be used for a wide variety of financial needs. Entrepreneurs can use it to find successful peers willing to finance them.

Vendor financing

In this approach, the entrepreneur talks the manufacturers and suppliers of goods and services into deferring their payments until the products are sold. This can lead to an extension of payment terms to a duration of months or longer. However, this depends on the entrepreneur’s creditworthiness and payment of additional fees.

Purchase order financing

Purchase order financing firms enable new businesses to overcome scaling problems. Most startups are unable to accept large orders because of lack of funds to make and deliver the products. Purchase order financing firms provide the needed amounts of cash directly to the suppliers. This enables the deal to be closed, and profit to accrue to the new business.

Account receivables

This approach is similar to purchase order financing. The difference is that the funds are provided to cover unpaid balances not yet due or received from clients. This approach is useful for high volume new business beginning to scale up. It provides the funds on the sales immediately instead of waiting for payment which can stretch from 30 -60 days or longer.

Family and friends

Many successful entrepreneurs tap into this resource. Usually, the commitments are positioned in writing as bridge loans or promissory notes. These can be converted to equity at a rate decided by other investors later on.

In conclusion

Every business needs funding at various stages such as when starting, embarking on a new project, during expansion or when finding its footing following losses. External financing in the form of loans is the most suitable means of achieving these objectives.

 Yet, traditional lending institutions have set high lending standards which few enterprises can meet. To overcome this challenge of obtaining financing from conventional sources, many entrepreneurs are exploring new approaches to funding.

They think creatively about what they have to offer and also how to secure funding. Their approach is to sell themselves, more than what they have to offer, to secure all alternative sources of financing. Also, they remain open minded and never rule out any approach.

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Student @ Advanced Digital Sciences Center, Singapore. Travelled to 30+ countries, passion for basketball.

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Gilberto Vendramin and his project for Casa Tua and Saks Fifth Avenue

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Gilberto Vendramin is the man who leads the operations of Casa Tua  Cucina Food Hall. He managed this kind of concept  for more than 20 years in Italy, and he  accepted a new challenge in his career, in the city of Miami in the United States.

Gilberto Vendramin

For some time now, Casa Tua and Saks Fifth Avenue have been planning to launch a new project, which consists of the opening of Casa Tua Cucina in Saks Brickell City Centre, and they needed someone who was expert and self-sufficient in this type of special work. Casa Tua, Private Club & Hotel, was founded by Miky Grendene, and intended to reaffirm his ideals through this laborious project.Casa Tua Cucina is an Italian gourmet restaurant and market that measures about 18,000 square meters, and is composed of a full bar, a flower market and a custom home furnishings store. Casa Tua Cucina has the capacity to accommodate around 300 people at its tables; this Italian restaurant offers a unique experience of its kind, as it has 10 unique service stations, through a very well cared for, managed and efficient culinary experience.

“…we believe that sharing a good meal of ethical origin is one of the highest expressions of love. We want a group of passionate chefs from all over the world to help us find the best artisans and small producers who put their hearts into their work. Saks is the perfect destination to expand our presence in alliance with their understanding of luxury.

After the planning and official creation of this project, they determined that Gilberto Vendramin was the perfect candidate to perform this arduous task. Due to his more than 20 years of experience in the culinary world, this professional has a great command of food service, as well as culinary management, and any kind of operation that relates to them. He was also considered to carry out this wonderful task, for his quantitative experience in running this great place, which will be a great challenge for him, but those behind this project have confidence in his diverse abilities. It should also be noted that Gilberto Vendramin has good experience in the field of Information Technology, which many say is unique in its kind, which is applied to hospitality.

Although Gilberto Vendramin was the winning candidate for this great project, many of those who were considered for this project (as well as Gilberto Vendramin), believe that although Italian culinary art is very complex, the challenge that comes with this goal is something that you don’t have to give up.

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Silence Is a Virtue: 6 Things You Must Never Say After a Car Accident

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crashed car

flickr/sylvar

Following a car accident, we usually experience a rush of adrenaline that makes us tremble. Everything seems to be moving very fast, and in those moments, your actions mean a lot. However, what you say is very important as well. What comes out of your mouth at the scene can influence how the ensuing claims and damages are handled. Here are six things you should never speak after a car accident.

  1. “Everything’s fine, I can just go.”

Of course, not every car accident results in major damage and injuries. In these cases, you or the other driver may push the idea that you can both just call it even and leave. Never do this under any circumstances. Always insist on exchanging information and making a police report.

  1. “I am so sorry.”

Even when you’re not at fault, you might issue an apology, simply because accidents are tough on everyone involved. You really shouldn’t ever say this, as those who hear it can take it to mean you’re responsible for the accident. No matter what goes down, save your apologies for later.

  1. “I’m not injured.”

That adrenaline rush you get after an accident can mask pain. Even if your body isn’t coursing with adrenaline, there are many kinds of injuries one can sustain in an accident whose symptoms aren’t immediately apparent. If you’ve been in an accident, go to the ER to be checked over, and if an ache or anything else does arise in the following days, get to a doctor right away.

  1. “This is all my fault.”

You think you know what happened, and you’re pretty sure you’re to blame. Not so fast, there. You might be surprised what comes up during an investigation. It’s not unheard of for a person who thought an accident was their fault to learn that the other party was the one who actually violated traffic laws. In the same vein, don’t say anything which sounds like an explanation or excuse for your perceived errors.

  1. “I can’t be sure, but I think…”

The reason we shouldn’t try and explain how things happened from our perspective is because right now, it’s important to stick to basic facts. If your account differs from everyone else’s, it will make you look like the party who has something to hide. Only share information that couldn’t be construed differently by anyone else in that situation.

  1. “I can handle this myself.”

Chances are, you don’t know the person you collided with. You don’t know what they’ll say, do, or claim a week from now, even if they’re being very calm and collected immediately after the incident. You also don’t want to tangle with their insurance company alone. Hiring an auto accident lawyer is the best way to ensure fair end results.

So, what should you say? After an accident, you should ask all parties involved if they’re okay, and call for help as quickly as possible. You should provide accurate, up-to-date information about yourself. From there, make your interactions with police and insurance companies as simple and fact-based as you can, until you can get your attorney on the case.

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If you would want to build your own company, what would you need?

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Marketing business work

First of all you should have an idea. The next step, I guess, would be to have a business plan. That’s more or less an estimation of what your idea is going to cost you and studying all the laws you have to obey to be able to pursue your idea. Then you are going to need investors. I think that is the hardest part. You have to convince them that you have a good enough product to give money to, but not so good, that they want to take it away from you. And that, my friends, is a very delicate line to balance.

But let’s say your dreams come true, and somebody gives you money…. Now we have an obligation to a third party. You don’t want to let that person down, that is trusting in you. The conscience comes into play. But you are hopeful, you have a good idea, and you are going to do your best to achieve it.

So now you have to look for a location. A place that can fit your idea, it’s possible expansion in the next couple of years, the right location and a cheap price. All of this should be in the business plan, as well as future customers and maybe some other stuff that is important to the idea.

Location is an aspect, that is often ignored by the general public, because they think: If I see it, everybody else can see it too. But that is not necessarily always true. We all have mediocre ideas: “they should put an ice-cream store in that corner”, “if I could, I would open a company that sells things online”, “maybe I should start a food-truck”. But please remember: who is going to be your customer? What makes that corner so special for the an ice-cream store? Why will people buy from you online? Do you really cook well enough that somebody will buy your food out of a truck?

College students may tend to observe the tendencies of technology and decide to spend a great amount of money in something like electrospinning equipment and try to be ahead of the industrial need. This is a good idea, but you have to know who you are going to sell to, what the market value is for the quality of your product, in which country, city and street you are going to make the most sales and how you can make people notice you.

Then again, your idea doesn’t have to be a business idea. It can be more abstract: “ I want to change the name of my street”, “I think smoking has been criticised enough”, or maybe something like “I wish I could send all my leftovers to a third world country”. Those dreams are a little more difficult to follow. But the plan starts in the same way: Make an estimate, what it is going to cost you and study all the laws you have to obey to make your idea reality.

Now the first thing people will turn to is the internet. What can I find online, that will tell me how the state of the market is. My guess would be: nothing. Nobody really advertises their needs and advantages online. They do it in person. And you can’t look up the laws online, at least not for free. So then where do you go?

You look for the person who is most related to the subject, and you start to ask questions. This person may or may not want to hear You, but your ideas will certainly be heard. And then comes the question: is it more important to achieve your goal and let somebody else take the credit for it, or do you fear that the person who is listening to you is going to use your idea to achieve his own means, even if it is against what your idea originally stood for.

But then again, have the peace of mind that no one can ever be trusted. We are all humans, we all fail, disappoint and make promises we don’t know how to keep. But to be honest, If we don’t try to pursue our ideas, how can the world ever get better? How can we, the human race, ever take the role as the dominant species on this planet, if we know that our current state of industry is only killing other species and exploiting the planet we live on. Hopefully somebody has a dream, that will allow us to live in balance with the rest of nature.

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