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Quick guide to attract credit or financing to your business

David Arana, CEO of Konfio, a startup that has raised 18 million dollars, reveals his secrets for you to get either credit or financing of capital funds.

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

In Mexico, almost 70% of entrepreneurs believe that their business growth is slowed by lack of access to credit , according to a study carried out by the startup Konfío , dedicated to granting credit to small and medium-sized companies (SMEs).

According to Konfío's findings, only 4 out of 10 SMEs have formal credit . And to this problem is added that there is a lack of knowledge of other funding formats, explained David Arana, CEO of Konfío, during the Business without limits event, organized by this fintech startup that has already raised 18 million dollars in financing.

This ignorance of financing sources causes 80% of businessmen and entrepreneurs to use personal credit or credit cards to grow their business.

Arana gives a guide to attracting credit or capital to a business. First of all, says the expert, it must be taken into account that if the need is to generate immediate value, the best option is to acquire a loan, but if what is needed is to create long-term value, the ideal is to get a capital investment .


How to attract credit to your business?

The CEO of Konfío gives two specific recommendations:

1. Credit should be a tool for growth. It must generate an impact, if requested it must help to grow by buying assets or closing a sale.

2. Choose the right product. The conditions of this credit that you are looking for must be optimal, that is, you must look at the terms, interest rates and compare credits.

How to attract capital to your business?

“I would have liked to have this guide when we started at Konfío,” says Arana, who dictates the next steps to get equity fund financing.

1. Start early. The process of raising investment takes four to six months, therefore, recommends Arara, you have to start with time to generate interest, talk with the investment committee and be clear about the market, the differentiators of the product and the strengths of the team.

2. Create strategic relationships. "Each talk can be useful, you have to build a network," recommends Arana.

In relationships with partners, you have to think that they should be complementary. “It is like a marriage, it is not a transaction; it is something long term ”, sentence.

3. Have the business figures. It is important to know that unit revenue minus unit costs equals yield.

In sum, based on his experience, Arana warns that "a 'no' can be temporary and that each interaction is a learning process".