Financial Pool: What is it? Why is it convenient to diversify it?

What is the Financial Pool?
The Financial Pool or Financing Portfolio of a company is composed of the different external sources of financing it uses to meet its short, medium, and long-term payment obligations. Although having profits, poor management of financial resources can lead to the closure of a company or limit its growth. It is advisable to have our portfolio diversified in any circumstance, but in a crisis context, it is not only advisable but essential.
In a context of volatility, banks limit credit, and many SMEs and self-employed individuals either lose access to financing or the one they obtain is insufficient. The existence of other sources of financing provides the necessary liquidity to the business fabric, strengthening it.
Is the Financial Pool the same as the Banking Pool?
Not exactly. We can say that the Financial Pool includes the Banking Pool but goes beyond by also including other non-banking sources of financing. When corporate and individual debt was 100% bank-related, the preparation of a report detailing only operations with different Banks (loans, credits, etc.) was sufficient to detail debt risks and repayment capacity. But today, this report would be limited and incomplete. Not reflecting other liquidity avenues offered by the market is not assuming the current financial reality and represents a loss of reliability that can lead to erroneous conclusions.
How to manage my financial pool to face the current Crisis?
Perhaps looking back to learn from the past through objective and weighty opinions such as those of The Foundation for Financial Studies and The Circle of Entrepreneurs may help. There are no two identical historical moments, but there are problems that repeat over time.
It was another crisis:
"The crisis has shown the problems associated with excessive indebtedness, which makes the company vulnerable when access to financing is closed. If the dependence on a single source of financing is excessive, the vulnerability is even greater, and this is the case of Spanish SMEs highly dependent on bank credit."
(Article from Expansión, April 14, 2015; Diversifying business financing: that's the question)
But the problems are the same:
"The recent report "The challenges of financing the business sector" by the Foundation for Financial Studies and the Circle of Entrepreneurs warns of the need to move towards a more balanced and diversified financial structure, with a greater weight of financing in the markets.............
And among the solutions, Crowdfunding was already being discussed:
"Encouraging crowdfunding would facilitate a significant number of companies and innovative ideas access to collective financing mechanisms, with all that entails in terms of learning, management, and coexistence with a diverse and more or less extensive shareholder base. It can also help build and improve shareholder culture and expand the set of companies preparing for an Initial Public Offering, especially medium and small-sized companies. It is advisable to clearly delimit the group of crowdfunding formulas that channel business financing and offer returns to investors."
It should be noted that five years ago in Spain, Crowdfunding was taking its first steps, while in the Anglo-Saxon world, it already had a significant impact as an alternative to the lack of liquidity for SMEs and self-employed individuals caused by the financial crisis of 2008.
As a positive message today, we can say that although liquidity problems are the same, alternative financing options have developed considerably in our country. They are increasingly varied, stronger, and better known, although there is still a long way to go. At INVERSA, we are convinced that crowdfactoring will play an important role in economic recovery. Financial diversification will be a fundamental piece in business management.
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