In addition to the business idea, having the owners committed to the company profile, and raising the capital they need to operate, are the basic conditions for starting and maintaining a business.

When setting up, it is advisable to carefully plan and substantiate your company’s cash requirements with analysis, since the least expensive of all solutions is to avoid using additional external sources of money. In the following, I would like to briefly summarize what are the events that can cause financing problems in the life of a company. Why does a business need a bank loan? It doesn’t matter if the company has short-term liquidity problems or wants to finance a long-term return on investment.

Small businesses can be divided into five groups in terms of financing.

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For start- ups , fast growth, maturity and decline . Each section has its own specificity, unique problems and funding problems. In the start-up and start-up phase, provision, financial management of the preparation, establishment, registration costs (legal costs, regulatory approvals, bank charges, car financing) and commissioning (fixed assets, current assets such as raw materials, parts, accounts receivable, inventories) main task.

In addition to fixed costs such as wages and salaries, utility charges, rentals, movable and immovable property insurance premiums, in a period of rapid growth and maturity , cash requirements may be related to the following: or to finance a planned project, investment, development, business loan. A company’s need for money may be temporary or permanent, and may be related to maintaining or expanding traffic. The need for money can be triggered by settling an overdue supplier debt, starting an investment, launching a new product, starting a new business, or strategic sourcing, and so on. There are several reasons why you may need money in your business.

If a company is already undercapitalized or is growing too fast

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Or business owners may be withdrawing money from the business too quickly or too much to finance their personal needs, it can cause serious liquidity problems. A common source of problems is when the payback of a trade receivable increases, or when the trade payables are shortened, the company may have too high a stock. Liquidity problems can depend on seasonality, late payment by customers, or even unexpected expenses. The financing of current assets and inventories is a basic task for smaller and non-capitalized companies.

In the start-up phase, no great success can be expected without market research, assessing the needs of potential customers, and planning the amount and timing of expected costs and revenue. Generally, companies need to finance the preparation phase from their own savings. Commercial banks do not lend to start-ups at all, and EU and state subsidies are still very limited.

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