The search for working capital in the last decade has become a far more difficult task than ever before. As recently as 20 or 30 years ago not only entrepreneurs or private individual played a role, but also the experience, reputation, payment history, social environment, the actual idea plus many other factors. Decisions were often made by people from your own social environment. As it was for hundreds of years.
But today decisions are often made by software and computers. Internet banking and modern data communications often dominate and can prevent a positive credit decision on the funding request. The personal contact and knowledge of the personal situation which used to be for centuries the basis for the financing business has disappeared almost completely.
The borrower doesn’t get to know the lender any more.
Often it is the small or mid-market companies needing a commercial loan or the private person that has the most problems seeking working capital. The investment funding is a combination of deposits, private capital, commercial loans, joint ventures, seed capital from private lenders, investors, banks, etc. The variety of financing options is rising rapidly on the one hand but the viability is decreasing significantly. Very few small or medium enterprise knows the differences of terminology or the context and the possible consequences of applying these instruments.
Years of practice shows that the entrepreneur doesn’t need a complex financial instrument, but a conversation partnership, developed by an understanding by both sides of the finance or investment need. Often not a single percentage point of interest rate is important, but the sympathy and understanding of the situation, product or idea.
Loan or financing lenders offer a cash amount to be returned in installments or in whole with an agreed fixed interest rate. Investors invest in or are involved in a company for the economic rewards in the form of dividends or capital appreciation of the company involved.
Australianangelinvestor.com uses its platforms in order to establish contacts between members of it’s worldwide network and helps entrepeneurs find working capital for their projects.