Alternative financing: Helping companies when they need it most

Inflation, supply chain problems, energy costs, rising interest rates, the escalation of the war in Ukraine, the challenges linked to digitalization... The socio-economic landscape is full of uncertainties and challenges for companies in the real economy. This is why alternative financing can play a vitally important role in helping companies to undertake all the changes and transformations that will enable them to consolidate themselves in a highly competitive market. In the most convulsive economic times, it is even more relevant to consider in which businesses we invest our money. Since this operation not only allows us to get a return on the money we have saved with our effort but also has direct consequences on the lives of the people behind the business project we support with our money. Thus, ethical investment is making headway as an investment model that takes into account the values, objectives, and ideas of the people and seeks to encourage the implementation and success of projects that benefit society as a whole and strengthen the local productive fabric. In today's article, we will address the role played by alternative financing platforms in promoting ethical investment and helping real economy companies when they need it most.

Resources to overcome macroeconomic uncertainty

A small investor cannot change the macroeconomic tide, or shed light on an uncertain outlook. However, they can help real-economy companies prepare for uncertainty and consolidate their business models. In an increasingly global and digital world, an event thousands of miles away can have an impact on neighborhood business. Without going any further, the war in Ukraine has caused a lack of grain supply, since this country is one of the main suppliers of this raw material worldwide. This has triggered a major rise in flour prices. So much so that the price of flour and cereals in Spain has grown by 39.4% in the last year. A company dedicated to the production of pastry products, bread, and pies has seen how its production costs have increased dramatically. Unable to pass on this increase in its entirety to the price of its products, the business may have had to resort to financing products to obtain liquidity or make changes to its business model that would allow it to avoid reducing its profits. This is where alternative financing models such as crowdlending, crowdequity, or crowdfactoring come into play.

The responsiveness of real-economy companies

The big problem with economic uncertainty is that many companies lack the resources to face the unknown and implement changes in the short term. In a stable scenario, it is easier to foresee what may happen in the coming months and take preventive measures. However, in a context as volatile as the current one, businesses need to be able to respond to unforeseen situations. To do so, they must be able to obtain liquidity in the short term. While the financing products of the traditional banking system require a greater bureaucratic burden and consume CIRBE, the services offered by alternative financing marketplaces do not consume CIRBE and make it easier to obtain liquidity in the short term. Thus, if a company has to face an extraordinary price increase during a month for a certain good, it can finance itself to meet this unforeseen expense and prevent its accounts and economic activity from being affected by this price increase. In today's fast-paced world, companies must be agile, dynamic, and proactive when making decisions. Continuing with the example of inflation, a given product may cost considerably less today than it will in a couple of weeks. Companies must therefore be prepared to manage their purchases efficiently and thus reduce their operating costs. The same applies to supply shortages. If a particular good is in short supply and can be expected to remain so in the short to medium term, if an opportunity arises to buy a large lot, it is important that the business can obtain the necessary liquidity to make the purchase.

Flexibility to seize opportunities and implement change

From what we have pointed out throughout this article, we can infer that flexibility is a central characteristic that companies in today's real economy must have. This flexibility can only be achieved if the necessary economic resources are available to make far-reaching decisions, both in terms of the purchase of supplies and the investments to be made. It is of no use for a company to be able to deliberate quickly if it cannot take action to turn decisions into action just as quickly. Alternative financing marketplaces such as Inversa Invoice Market are characterized by their agility when it comes to managing financing requests and making it easier for savers to invest in businesses. This is why flexibility is at the heart of these projects that put powerful technological developments at the service of companies and investors.

Everyone wins: get a return on your savings

Savers who opt for alternative financing services do so not only for ethical reasons or out of a commitment to the companies in the local productive fabric. Rather, through these investments, they manage to get a return on their savings in a context in which these are being devalued due to the inflationary spiral. Thus, helping companies in the real economy to cope with the socioeconomic situation can also become a way to protect their savings and counteract the rise in prices by earning interest. In this way, alternative financing platforms become tools that make it possible to combine the needs of companies with the objectives of investors, allowing both to win. For businesses, new financing channels are opening up beyond the traditional banking sector. These channels are also more agile and allow them to obtain liquidity in the short term to be able to manage eventualities or take advantage of all the business opportunities that arise. For investors, alternative financing offers products that combine profitability and ethical investment. Savers can invest small amounts of money to earn interest to offset the loss of purchasing power while helping companies in the real economy to grow, consolidate and emerge triumphant from all the challenges of the present. Alternative financing represents a paradigm shift and can be a first-rate tool to help companies in complex situations such as the current one. Thousands of small savers can achieve great things and contribute to strengthening the local productive fabric and employment.