11 Mar The 5 best financing options in Mexico
In recent years, ventures in the country have been increasing. Regardless of age or gender, the desire to create your own business is always latent. According to INEGI data, 89% of companies start with their own money or friends and family, while only 3% receive an investment or formal loan. Next, we will tell you the 5 best financing options and their characteristics so that you can choose the best one and boost your business.
1 # Crowdfunding
To obtain money through collection, there are platforms that operate in such a way that you present your project and interested in it, they can contribute the amount of money they want to achieve your goal. In our country you can find the following:
Indiegogo is an international platform where you can request funds to be able to make from a small idea, a company, a project or even a charitable cause. The interesting thing about this option is that there is no limit on the amount to be collected but you must set a deadline for it.
Indiegogo charges 5% of the total collected to be able to cover the administrative expenses such as the page server, staff, advertising and 3% for the transaction costs of the money.
One of the benefits is that it has a marketplace in which successful endeavors are enlisted and achieve their first sales. Also, you can continue to raise funds for the next stages of your business once you complete your first campaign.
Kickstarter is a platform specialized in projects that have to do with technology, art, design, cinema, food, games and music. What differentiates it from many others is that, if the amount fails to be collected within the time limit, the funds are returned to the investors. This, in order to generate confidence that the projects will be carried out and a lower risk for those who contribute.
The platform charges 5% of the total collected to cover administration and support expenses, but only for those projects that did achieve the goal.
Kickstarter is a great platform recognized globally and this helps projects have greater visibility and opportunity to find investors from anywhere.
2 # Loans online
Online loans have emerged as a different option to traditional banking for entrepreneurs. Some of those that operate in our country are:
Konfío is an online loan platform that provides support to small and medium businesses that have a minimum of 3 months of billing. The financing offered ranges from $ 100 thousand pesos to $ 2 million pesos.
The average annual rate they offer is 29% and the interest rates are set according to the level of business turnover. A commission for the opening of 5% is also managed, which is discounted at the time of depositing the loan.
The process is completely online and you can receive credit to your bank account in 48 hours or less. They do not request endorsement or guarantee. You can make advance payments without penalty and upon liquidation, you can request a second loan that they authorize in just 3 minutes.
3 # Traditional banking
Banking is the traditional method to acquire financing, either personal or for business. In the latter case, all the banks that operate in our country have designed financial products that offer loans specifically for small and medium enterprises.
The average rates they offer are in a range of 27%. You must open an account to manage your credit and cover the commission amounts. Also, you need to present a guarantee or guarantee and your business must have a minimum of 2 years operating.
Although the process is long and can take up to 27 days to get a response, by paying in time and form can offer an increase in the amount.
4 # Competitions
There are several venture capital competitions in which you can participate to receive financing and at the same time mentoring. In Mexico you can find incubators and accelerators like 500 startups or Angel Ventures.
The costs to participate are null. But once you manage to qualify, being a venture capital, investors will ask for some participation or shares of your company equivalent to the investment they make.
Apart from achieving a great investment for your company, you have the opportunity to acquire knowledge from business experts.
5 # Government institution
Government institutions can also be an option, especially for businesses that are in their initial stages. The government has created incubators and institutes for the entrepreneur that they support through financing and development programs.
To enter the incubation programs there is no cost but you must compete. The loans offered are handled by participating banks, and in some cases the fees may represent 13% per year plus the opening of an account and additional commissions that they may request.
The greatest benefit that a government institution can give is that it supports ventures even if you only have the business idea. That is, they are still in prototype and you want to start creating the company.
As you can see there are several financing opportunities in our country that support entrepreneurship. One tip that we can share, is that before applying for your credit, thoroughly investigate the requirements and benefits that you can obtain so that you can choose the one that best suits your abilities and needs.