Top 5 types of financing for SMEs

Borrow money for your company?

If you need extra capital for your business, you can borrow money from various agencies. But which parties are most relevant for small and medium-sized businesses? A top 5.

  1. The bank (40%)

The vast majority of business loans in the Netherlands are provided by the bank , 40 percent of the credit provided still comes from the bank. 80% of companies are therefore the first to come to the bank. Small companies (such as start-ups) or companies with a relatively low financing requirement can turn to the bank less and less often.

  1. Leasing (23%)

Most companies want to borrow money to finance their working capital. You can also ‘borrow money’ by renting or leasing assets. Think of your company cars, but also printers, servers, excavators, business premises, etc. With many business assets, a rental or lease construction is possible, which gives you more financial leeway to do business. Leasing has become more popular in recent years as a financing option for SMEs.

  1. Current account (12%)

A current account is simply overdrawn on your bank account, usually for a relatively high interest rate. Especially for (a series of) small, fast investments, a current account credit can offer a solution. This is a form of long-term credit that is used by many entrepreneurs.

  1. Private investors (8%)

About 8 percent of SMEs see a good alternative in investors in 2019, also known as private equity. They can lend or give you money in exchange for some kind of consideration, often shares in your company. There are various platforms in the Netherlands that link entrepreneurs with investors. Small companies in particular think of investors.

  1. Crowdfunding (2%)

Crowdfunding  is also growing in popularity, the market grew from 32 million in 2013 to 329 million in 2018. Crowdfunding is borrowing or receiving money from a large group of acquaintances and strangers through an online crowdfunding platform.

Source: CBS Financing Monitor 2019

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