Alternative Financing & Evolution of Capitalism: Trends

Alternative Business Financing

Alternative business financing has become an issue of great importance in the wake of the recent financial crisis. The crisis led to a reduction in bank credit for companies, which has allowed alternative forms of financing to emerge. Alternative financing is used to finance companies and individuals beyond banks. It is particularly attractive for SMEs and individuals.

In the past, in Spain, the sources of funding were basically from banks, with easy access and fast processing. Thanks to these facilities and good interest rates, bank financing was consolidated over other loans. As a consequence, before the beginning of the crisis, we found a situation where the weight of bank financing was predominant.

With the outbreak of the crisis, the distrust of foreign investors in the Spanish financial sector caused the banks to increase the cost of offering credit to companies.

Nowadays, we have different alternative financing options. These include the Alternative Stock Market (MAB) and venture capital entities that represent promising alternatives for Spanish companies, which, in addition to the recently approved regulations, would allow greater access for SMEs.

On the other hand, we have the so-called crowdfunding, which consists of online platforms promoting participatory funds, or corporate credit P2P, which are gaining strength with respect to loans but are still somewhat limited in development.

In the future, experts believe that funding from sources other than markets and banks will probably be more important than bank financing.

In conclusion, alternative financing allows the possibility of having a new financial provider and being able to diversify its external financing sources, quickly, conveniently, and transparently at a very competitive cost and without having to link the loan to the hiring of another bank product.

Industrial Capitalism

In this context, the so-called industrial companies were born; they used to be the companies of that century. The economic growth of the companies of this time was accelerated, and the first great companies were born, as well as monopolistic and oligopolistic markets in which one or a few companies divided the total quota of the same.

Financial Capitalism

In this context, the company stops being exclusively a unit of production and becomes a financial and decision unit. Financial capital arises from the need to find new sources of financing, as companies were used to needing a larger volume of capital to incorporate technological innovations and to achieve concentration of the market in the hands of large cartels, trusts, and corporate holdings.

Companies Today

At present, the role of business has become much more complex due to phenomena such as globalization or the relentless progress of new information and knowledge technologies. In today's business, and especially in large ones, the figures of the entrepreneur and the owner of capital are clearly defined.

Companies of the Future

In the future, companies will get used to automating all processes and adding robots that will destroy human jobs. Furthermore, artificial intelligence is one of the technologies that has surprised us the most in recent years, and it will continue to do so.

Recommendations

In my view, I recommend that companies add "new habits" in the near future, such as advertising intelligence, and don't forget to increase the sustainability of the company because, in the future, it will matter a lot.