As a SME, it can be difficult to get financing in place on reasonable terms that do not include selling shares at a value that is not proportionate to the real value, moving the majority to investors, or creating different equity classes with differing interests.
If you have reached a certain stage you may be able to get a credit in the bank but it is expensive and usually comes with a personal guarentee or security in real estate which is typically the owners home. Furthermore, almost all current credits are instantly callable by the bank, which is not very comforting and makes it difficult to make a solid plan .
If you have considered applying for a grants from one of the public programs such as the Innovation Fund, the Growth Fund, EU funds or the like, funding can be difficult to get in place because 50% self-financing is required in most cases.
So you have some hard choices to make if you want to move on. You can forget about financing from the others and let the company grow organically – which in some situations can be a good strategy but in many industries where the innovation is fast and furious it simply does not work if you want to compete.
You can choose to try and find the right investors and accept that you have to give a relatively large portion of the company away early on in the process. It can be the right solution especially if you get the right strategic investor(s). But it can also mean losing control and creating conflicting interests in the company which can become expensive in the long run.
If you are applying for one or more of the existing grants or funding opportunities that are available from the public, it is necessary you have the resources to participate. By that I mean that you have the time and knowledge to apply for the funds and resources to manage the process both before and after getting the funding and you will need the capital required to be considered at all, which in most cases will mean 50% self-financing and / or security in the form of real estate or the like. Not always an option unless you get investors.
But there is an alternative to the status quo. It simply entails using the differences to raise capital in different markets. Where we in Europe are 100% focused on the project, which in a sense makes sense, then there are other places where one’s own and the company’s credit profile is crucial. In effect, this means that you can raise money on reasonable terms without having to depend on the project itself. Therefore, it is a good idea to establish an investment company for the purpose of financing one’s project (s). It costs around $ 20,000.00 + and takes 3-12 months but then you can also get financing in the order of $ 100,000,00-2,000,000,000.00.
One of the advantages is that you have full control over the terms on which your project is financed since its from your own finance company. At the same time, the money you spend when establishing the finance company is an investment where you build a value you can sell if you wish at a later date.
It can sound complicated and it’s a process and you need to know how the market works to take advantage of this opportunity. But this is where we come in. We can provide the turn-key solution for you so all you have to do is focus on your principal business.
If you are interested in knowing more about the program, please feel free contacting us for an informal talk about the details and if the program make sense to you?