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Cooperative Business Financing Sources
Business financing related to the stages of business development. In other words, for every stage of business development, require different financing sources in accordance with the level of development and maturity level of business.
For example, new business starts and has not accumulate any assets can not be financed by the bank (because not yet have a track record of business and not have assets of over credit guarantee / collateral), but could be financed from own capital or equity partnership with another party who considers business is feasible.
So, in essence, financing is also a "tool" to develop a business (as a legal entity), where the most basic things is actually the ability to manage the business in accordance with business plans that have been made.
Here is a model that describes the mindset of business financing needs, whether from its own capital, or from investments / loans of others, since the business didinikan to business development in subsequent stages, from an investment standpoint. For further explanation the following is more detailed explanations one by one the characteristics of the financing system is:
Equity
Given the financing sources of equity capital is owned by himself, of course, its use is very flexible terms (up to the entrepreneurs concerned), although there are some guidelines as follows:
1. Often, self-financed effort tends to encourage concerned enough to not be careful in using the funds, since they do not need to be accountable to anyone.
2. As new entrepreneurs start businesses, often owned by limited capital, but any kind of business requires some capital to achieve scale economies of scale business, so most employers have not been able to meet its capital needs from their own capital only in starting a business.
3. In addition, capital itself is often required as a reserve fund for consumption at the time the business has not been generating revenue for a while for one reason or another.
Saving and Credit Cooperative Financing
Cooperative Savings and Loans (KSP) is essentially self-financing (in accordance with the principles of cooperatives), which was built by a group of people who have similar interests. Nevertheless, the KSP is being developed by government regulatory systems to be able to become a vehicle for an alternative financing system for SMEs. Several important developments of the KSP are:
1. KSP to gather funds from non-members (other parties) either in the form of investments and in loans, to increase the ability of KSP in gathering funds under management to improve loan services to members and the community.
2. Employers who want to borrow funds from the cooperative should be a member in order to take possession of the rights of the wider as members, by meeting the obligations as a member of, among others, mandatory savings deposit funds.
3. Furthermore, based on business plans that are considered feasible, an entrepreneur can borrow funds to the cooperative in return for loans or interest-shaped form of profit sharing.
4. Conditions other than a proper business plan (collateral for the loan / collateral, the proportion of own capital to finance / self-financing, etc.) are not governed by the regulations but defined itself through a meeting of members (more flexible), with the intention of creating accessibility of SMEs to financing, much better than the banks.
5. Based on their characteristics, segments suitable to be financed KSP is a newly started business, requires relatively little capital, and are relying on the ability / competence of the entrepreneur in question rather than relying on capital.
6. In addition the government has a program revolving fund will be channeled through the KSP are described further in the Facilitation of SMEs by the Government.
Venture Capital Financing
Venture Capital Financing is basically an institutional investor, who should distribute the funds in the form of inclusion, not in the form of loans so that the form of cooperation is to share profits and losses (profit-loss sharing).
What is unique of venture capital compared with other investors are, according to regulations, venture capital limited period of its investment in a company, so that at certain times of venture capital will sell rights to their capital investments to other parties, diinana difference between the initial value of investments and the current value rights sold its shares of capital is a source of profits (in the form of capital gains).
To obtain financing and venture capital needs to be done by employers are as follows:
1. Preparing a proper business plan, in which standard operating profits deemed appropriate by the venture capital is higher than the specified bank (because the financing is considered more risky than banks in the form of profit-loss sharing), with the idea to cover the total level of risk financing, which succeeded and failure.
2. If deemed feasible to be financed, venture capital will put the officer as a supervisor and promoter of the business concerned, because basically the form of investments in venture capital funding so that its position is no different with the owner of the company itself, namely as an entrepreneur.
3. At any given time along with relevant business development, venture capital investments will sell the rights to another party with price calculation based on a specific calculation method, the first priority is offered to entrepreneurs concerned.
4. Based on the characteristics, costs (cost of money) on venture capital financing is more expensive than the banks, so that the segment that is suitable for venture capital funded business segment which is decent but not yet accepted by the banks (but not bankable feasible)
Bank Financing
Bank financing is basically a relatively conservative financing (the distribution of funds with terms that tend to be tight), which is understandable considering the banking position as manager of public funds and must protect the interests of society as a store of funds (not allowed to channel funds into the risky business sector high).
To obtain financing from banks that need to be made by employers are as follows:
1. Preparing a proper business plan, where the business is not a new business but should have been run for several years.
2. In addition to the business plans Iayak, another requirement is primarily collateral for the loan / collateral is generally worth 100% or more of the value of loans and the proportion of own capital to finance / self-financing is generally worth 30% or more of the total financing of the business plan.
3. If deemed feasible and meets the requirements, banks will provide funds in loans in return for interest on loans or for the results (Islamic banks), although not because it is pure profit sharing profit sharing, and not about the loss sharing.
4. Based on their characteristics, segments suitable to be financed by a bank is a business that has been run, will cost loans to expand business (not a new business), and have hard assets (precious things) for collateral.
Factoring FinancingFactoring financing needs to be developed by empowering KUKM because it has unique characteristics and needs of SMEs, especially by SMEs that have been running well and needed financing to grow their business but do not have hard assets (precious objects), which is enough to guarantee.
To obtain financing from factoring financing institution needs to be done by employers are as follows:
1. Preparing a business plan that Iayak, where the business is not a new business but has been well proven by the good level of product sales.
2. Factoring financing basically not the form of loans or equity participation in the form of buying and selling but the entrepreneur assignment to another party, where bills not yet due when the business concerned immediately require funds to operate or grow better.
3. If the bill is considered reasonable (not too risky) to be purchased, the factoring agency will bid to purchase the assignment is worth less than 100% invoice value, whereby the difference of value bills and purchase value assignment is the source of profits.
4. Based on their characteristics, segments suitable to be financed by the agency factoring is a business that has been run, will cost loans to expand businesses, and has no hard assets (precious objects), which is enough to guarantee, but has a lot of accounts.
How to Make a Funding Proposal
If you want to propose a financing, the entrepreneur must be able to deliver on the owners of capital on the business carried on with sufficient clear and convincing. The best way to do that is by making a written funding proposal is good, which will describe all the related information in a structured way. Although a good funding proposal is pretty time consuming work and power, but hard work will give a worthwhile result. Making a good proposal will give the borrower or investor concerned that employers really understand the work done and its needs, in this case the need for capital. These proposals should be complete but concise and structured.
Instead, the proposal is to answer common questions asked by investors and give a convincing picture of the business. However to note, that picture is a way to convince the presentation of the company as it is, do not go overboard or make statements that are not true.
Statements that are not actually going to make it difficult in the future and will surely be questioned by investors. It is better if considered for use support services and other parties to prepare a funding proposal is to obtain better results.
The structure of financing proposals in general are as follows:
1. Title proposala. write down the related financing is aimed at what the business development.b. names, addresses and phone / fax / e-mail contacts can be contacted.
2. Overview of business basically, this section describes the business plan, the scope of its contents have been described in the above way of writing the business plan, once again basically include:a. marketb. productsc. production systemd. stages of business developmente. business managerf. business financeg. business profile
3. Business performanceIn this section, considering the business has been run (except for new businesses) must be presented achievements for this through measures of business performance, especially considering the financial performance mi intent is to request financing proposals, including:a. Analysis of internal cost recovery / IRR (Internal Rate of Return), The return of investment / ROL (Return on Investment), return of assets / ROA (Return on Assets)b. Bnalisis Profit Margin (percentage rate of profit per product sold)
4. Information needs financing / investment, including:a. Basic / reason for the financing needsb. Detailed information on financing needs, including: i) the purpose of financing, forms of financing (equity, loans, or for the results) the amount of financing, the financing, and details the use and allocation of financing planned. ii) Prediction of the flow of new cash, including repayment schedule / installments of the loan if the financing provided by the individual. iii) the prediction gain new business if the financing provided by the individual. iv) analysis of the ability of return / installment financing, the form of IRR analysis of the financing, where financing is considered feasible if IRR is relatively higher than the interest or profit margin financing.
5. Financial information, including:a. financial statements, including: i) the consolidated balance sheet, should report the last 3 years if the age of the company has more than 3 years running. ii) the company's income statement, you should report the last 3 years if the age of the company has more than 3 years running. iii) report tax payments, should last 3 years if the age of the company has more than 3 years running.b. information forms, status and value of assets that can be secured (collateral)c. personal financial statement if necessary
6. Supporting information, including:a. attachment data bank account that is used as a place to open an account for businessb. attachment data bank contract that has provided financing facilityc. attachment data contract other financing sourcesd. attachment data debt contracts / accounts receivable.
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