Financing your business, Advice from a banker Part.II

- What (s) benefit (s) to go through a bank rather than a business angel or venture capital? What are the main differences?
We must differentiate
- Venture capitalists, who are willing to take a significant risk, financially equivalent to the creator and without warranty, in exchange for a higher expected return, usually at a horizon of 5 years.
Their involvement provides funding needs difficult to finance by banks (research and development, for example), but reduces the profitability of the creator who shares the capital gain by his activity.

- The bank lenders, who accept lower profitability (margin on credit) in return for lower risk that reduced by guarantees.
The use of bank lenders allows you to play the leverage and improve the profitability of capital (return on capital exceeds cost of credit), but a start-up and very innovative can only marginally be financed with banks will have recourse to capital investors.


- How is evaluating a project started by a bank? What is the importance of training courses or the contractor in this assessment? Loan Entrepreneurship

ultimately, the decision to finance a business is about trust: the banker said: "I have confidence in the ability of that person to go through with his plan, I feel good." For the creator, inspiring trust is to first show his professionalism, he knows the area where it will start, he thought his project and was given the resources, including human and financial, to succeed, etc...