Access to Capital Programs: All in One

Alternative Corporate

When the capital structure of companies is analysed at a general, global and multisectoral level, it can be seen that this is mainly banking and with a strong bias in the short term.

Capital from alternative sources such as business angels, capital markets (bonds, shares, securitisations, tokenisations, etc.), direct lending, mezzanine debt, venture capital, crowdlending, crowdequity, etc., is generally very small, at around 10%-15%. This figure is even lower, almost non-existent, when we talk about small professionals or small businesses.

The overall picture is only different in the US and in American reality. However, let's think that the majority size of companies worldwide is very small. Of the millions of companies in the world, 99.99% are small and medium sized, 99.00% have less than nine employees and, of these, millions have only one employee or none at all.

Given that access to corporate capital is basically bank financing at a global level, when the financial system has gone through the recent crisis and has had to "deleverage", this has had a very negative effect on companies in their process of seeking and negotiating financing. Some of them have suffered the denial of such financing and/or the cutback of the lines they had been granted.

In the international capital market, progress has been made in the field of alternative corporate capital programs. In MyNeofintech we have joined these instruments so that they can work realistically for any corporate user profile accessing the platform and that they are willing to go through the necessary process and the costs involved.

Legislators in each jurisdiction also want to encourage alternative capital instruments that actually serve companies to diversify their sources of funding and that are not exclusively traditional banking sources. ​

We could try to make a tour of the access to sources of capital of a company from its birth, from its conception as a startup. Normally, the capital of the company since its creation has a "certain order" even when the scope of the company can be global since its birth.

Today's start-ups must consider being global from the very beginning. Technology makes it possible to reach that global scale and to favour growth. Although the numbers have increased significantly.

Along with the capital of the "3fs" (founding partners, friends and family), that of this first phase is usually in debt and from public support institutions that operate in many jurisdictions. Such capital allows entrepreneurs to test their business model, start monetizing it and gain scale.

After the first phase in the environment of the first two years, the company may be on the verge of having positive EBITDA and consider the following, how, for example: complete the prototype, hire someone to boost the commercial area for its B2B customers, make a digital marketing campaign for B2C customers, climb other markets, even international, etc.

In this new phase, the capital is, in general, not yet bankable (the start-up does not have a positive accounting result nor perhaps the bank guarantees that traditional bank financing would require).

Within this phase, companies usually turn to private investor capital programs (business angels) to be able to complete this second milestone. This type of capital program is progressing inexorably around the world, although at a still slow pace. New profiles of private investors seeking global business opportunities are increasingly being incorporated.

Even in this circumstantial situation, our recommendation is that the company look for alternative, or perhaps better said "complementary" sources of capital to those that are purely available to the company itself at its location and are under its radar. ​

Within this approach is Ecobanka's MyNeofintech , access to global corporate capital programs that diversify sources of capital by accessing them quickly and easily. ​

MyNeofintech reduces the effort of the corporate user to access other sources of capital because it combines the financial with the technological. MyNeofintech allows companies to obtain funding directly from international investors without the intermediation of a financial institution. Its main value proposal derives from the agility and speed in the processing and obtaining of the required capital. ​

MyNeofintech with all the applied digital technology, perfectly differentiates the profile of each corporate user determining the ideal capital product, for example, for larger companies, the corporate proposal will be direct lending instruments in debt format, in order to reinforce the company's own resources and that the company can undertake growth projects, in many cases in new businesses and/or international markets.

MyNeofintech allows universal access to all alternative capital instruments, or rather, complementary, to traditional bank financing and constitute efficient options to the financing of companies in their objectives of business imposition and scalar growth, both domestic and international.