In search of funding
The measures the Administrations are assuming in order to support entrepeneurs look insufficient; yet it’s convenient to look up the Spanish law for entrepeneurship supporting and growth and employment encouragement. Even with this aid, the analysis of market and commercial value of your design becomes essential. Success in business depends on a good business plan.
The business plan is the entrepeneur’s cover letter for external investors. It must be consistent and in-depth, so as to show your ability to manage your project and implement it. It must provide a global vision of your project, analyse every management area of the company (production area, human resources, economic-financial analysis) and schedule the achievement of your objectives. It involves designing a framework for your activity and the objectives you’d like to achieve. The business plan must also specify the funding needed for starting the business, and how you will get the capital.
You can choose among several ways of funding:
•Grants: aids that may be provided to a company by any public or private institution intending to support a particular type of activity. There are financial aids, grants for investment, for starting a business, for young entrepeneurship, for female entrepeneurship, for technological development, for quality promotion and environmental protection. In the website of the Spanish Ministry of Industry, Energy and Tourism you can find several databases with support programmes and incentives for business start-ups (http://www.ipyme.org/es-es/BBDD/Paginas/HomeBBDD.aspx).
•Official Credit Institute: the Spanish ICO has developed the "ICO Empresas y Emprendedores 2013" Line, able to finance up to 10 million euro intended for productive investments, under leasing with a fixed or variable interest rate, reimbursable over several years, and a grace period of up to two years (during which time you will only have to pay interest). The loan includes origination and analysis fees.
•The European Investment Bank: it’s an European institution that provides long-term financing for practical projects, the economic, technical, environmental and financial viability of which is guaranteed. It grants loans and credit lines in which this institution acts as an intermediary between companies and banks: aimed at permitting companies to access the resources necessary for launching new products or an internationalization process.
• ‘Business angel’ and capital-risk funds: they are investors who access to a share holding of the company, based on their initial contribution and its valuation. It implies a negotiation process, that requires an in-depth knowing of the market situation, the entrepreneur’s responsibility, the product and its scalability. This kind of investors are a source of stable finance, that looks for projects with good prospects: they play an active role of evolution and control, apart from the financial support.
•Soft loans: they are loans not subject to the requirements and safety criteria imposed by credit institutions in standard conditions, under market interest rates and fees. In this kind of loans you may find low rates (under standard market conditions) or even nonexistent rates. Sometimes you may agree on grace periods.
•Micro patronage or crowdfunding: consists in implementing projects by the economical contribution of a number of people. Its volume may be as large as the project requires, and the law permits. As a general rule, every participant finance a part of the project, service or product. As examples: Verkami (for cultural products), Lánzanos (for cultural projects, technology and solidarity), Kickstarter (for any kind of project) and Goteo (for projects that promote the public domain).
Written by Raquel Prieto, Multiplier Eurodesk Cantabria@Europa