The ability to access resources for growth, resolving cash flow issues, developing new services, and expanding to new markets are just a few of the reasons why financing for SMBs is becoming more and more popular.
According to Banxico, 77.2% of businesses are expected to use some type of credit product between April and June of 2022 due to their steadily increasing use.
There are already a number of financing options available in Mexico, and businesses can choose the one that best suits their needs because financing sources have been diversifying. Learn more and choose the right strategy for your business.
Financing options for SMBs
To give entrepreneurs a more comprehensive understanding of how SMEs are financed, it is vital to discuss the many sources of funding that can be taken into account.
Bank credit line
It is one of the most typical methods of acquiring resources. Banks lend the requested amount of money for a predetermined time, during which the borrower is required to repay the original loan amount plus accrued interest.
Credit from Suppliers
This kind of credit focuses on the resources suppliers give to businesses so they can develop their products. With the understanding that the debt will be paid off in the future, without the need for interest payments.
Crowdfunding
These are digital platforms where a group of investors come together to contribute a requested amount from a borrower, which is typically not very high, in order to finance them. This kind of contribution is typically compensated with a share of the company’s property or future delivery of goods.
SOFOMES
SOFOMES (Sociedades Financieras de Objeto Múltiple, in Spanish) are groups of organizations that provide credit to businesses who, for a variety of reasons, cannot be approved for an infusion of resources through traditional sources of capital and financing.
Depending on the needs of the customer, they have flexibility and openness in their products.
Factoring
It is a financing system that functions by giving a financial institution control over handling the collection of the invoices that a business must collect. In return, the financial entity gives the firm the funds they need right now.
Merchant Cash Advance
It is one of the simplest and fastest ways to finance SMBs. The mechanism here is that a financial institution immediately grants a certain amount of funding. This is then paid back using a percentage of any sales that the applicant company does, plus a predetermined fee.
Benefits of choosing MCA
Due to its versatility and flexibility, this market anticipates significant growth in the upcoming years. Some of its advantages include:
- Little paperwork for approval.
- Very fast resolution.
- Almost immediate access to resources.
- Payments depend on sales, which makes them suitable and flexible.
- It is ideal for businesses that have been in operation for at least 6 months.
If you have a business and want to make it grow with the type of MCA financing, Pymes Capital has this product for you, with a quick response so that you can make progress as soon as possible with the growth of your business.
Sources