In this article, we'll walk you through 5 steps. We'll show you how to make the best choice and distribution between equity and debt.

Step 1: Map out your financial business situation.

Before you invest, it's good to review your financial business situation. One financially healthy company is able to meet financial obligations. This is an advantage if you want to raise debt.

A healthy company is not necessarily able to finance investments with equity. So it's good to provide insight into your financial health. Remember to determine the amount of equity in order to be able to make a good financing budget in the future.

Step 2: Create an investment budget.

If your financial health is in order, you're one step closer to investing. The next step is to make an investment budget. In this budget, you put all the investments you want to finance in the coming period.

This budget consists of two parts. The fixed assets (including machines and inventory) and current assets (including debtors and inventories). See an example of the investment budget below.

Step 3: Make a financing budget with equity and debt.

The investment budget shows the costs of the investment (s). Now you can make a financing budget. In this budget, you show how you will finance the investments.

Combine equity and debt financing. Try to make both equity and debt as concrete as possible. The example shows how concrete you can make the budget. Complete the schedule below as realistically as possible. It is important to arrive at the same amount as the total amount of the investment budget.

Are you curious about what you can borrow from Swishfund? Fill out our calculator for a clear indication.

Step 4: Make the choice; only raise own funds or also borrowed capital?

Does the financing budget show that you are not making do with your own funds? Then you will have to think about the choice to attract debt. We can imagine that you still have doubts about this. That is why we list the three most important advantages.

Benefit 1: Grow faster.

Investing with equity alone means it takes longer to raise the money. The result is that growth can stagnate or even fail. With external financing, you can invest faster. And investing quickly means continuing to grow faster. It's up to you whether you want to grow quickly or whether you want to make a long-term plan out of it.

Benefit 2: Seizing opportunities at the right time.

Entrepreneurs are full of ideas and ambitions. It is possible that an opportunity suddenly arises that you absolutely want to take. Unfortunately, your own funds are not sufficient to invest... By raising debt, you can take that opportunity at the right time and achieve your ambitions.

Benefit 3: Always have sufficient working capital at your disposal.

With debt, there is less pressure on your own funds. It literally gives you a little more breathing space. You always have enough working capital to cover unexpected costs. This allows you to just keep building your business.

Step 5: Find the right financier

Have you decided to raise debt? Top! The next step is to find the right and suitable financier. You can then go directly to the bank. There is a high chance that you will be rejected here, or not eligible at all. In addition, it is a long and complicated process. You must provide a lot of documentation and meet strict requirements.

Nowadays, there are more and more alternatives to the bank. This is what we call non-bank or alternative financiers. These include Direct Lenders (such as Swishfund), Crowdfunding platforms and Factoring Companies. Each form of financing is different and has different requirements and conditions. In order not to get lost in the different forms of financing, we have created an e-book to guide you through the alternative market. You can download the e-book here!

Starting to invest next week?

This is of course possible with your own funds, but also with a business loan from Swishfund! If you complete your application today, you'll know what the options are within 24 hours on business days. The loan can even be in your account within three days. We understand that you want to grow fast or take an opportunity before it's too late. Start your free request here.

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