Financial Management Area

Alternative Financing

Case study

Presented by:
DIANA DIAZ PATARROYO

EUDE EUROPEAN SCHOOL

OF DIREEE IdN / COMPANY
BUSINE5S SCHOOL CASE STUDY

You are requested:

a.- Determine according to the text the factors that affect economic growth (Maximum length: 2 pages).

b.- What role do resources play in the growth of the company.

What financial resources are available to SMEs for this purpose. Advantages and disadvantages. (Maximum length: 2
sheets).

a.- Determine according to the text the factors that affect economic growth (Maximum length: 2 pages).

By analyzing the factors that affect companies in their economic growth, it can be seen that companies can use their SWOT to
improve their strategies, perspectives and strengthen the way they do things as a company.

With this in mind, we can analyze the following factors according to the reading:

ENVIRONMENT:

Reading this factor we can relate the company's environment as internal and external which can lead us to an analysis as a
company of the opportunities vs. threats of that environment that can cause losses or gains depending on the focus on the
priorities that are held within the company.

These threats can be internal: the lack of training of employees, the lack of adaptation to change as a company and the lack
of improvement or optimization of business strategies, these threats can cause a negative result internally, because, if
employees and the company do not go in the same approach of priorities can lead to determinations of reduction of staff or a
temporary or permanent closure of the company for not visualizing the future that every day everything is changing to
strengthen companies internally thus achieving greater competitiveness, efficiency and quality among the members of the
company.If the employees and the company do not have the same priorities, it can lead to a reduction of personnel or a
temporary or definitive closure of the company because of not visualizing that everything is changing on a daily basis to
strengthen the companies internally, thus achieving greater competitiveness, efficiency and quality among the members of
the company.

There are also external threats: the lack of good promotional advertising of products and services offered by the company,
the lack of optimization of resources and the lack of improvement of the added value of the company in the products or
services offered, these threats if not attacked at the time they are detected can become a potential weakness for the
company and can focus perhaps on the extinction of the company from the market or be forced to sell the company to its
direct competitors and this decreases economic growth from all points of view.These threats, if not attacked at the moment
they are detected, can become a potential weakness for the company and may lead to the extinction of the company from
the market or force it to sell the company to its direct competitors, thus diminishing economic growth in all aspects.

The threats exposed can determine the progress or decline of the company, which also harms the economic growth as a
country, because, if the small or medium-sized companies do not progress, a possible monopoly of the large companies can
be projected, which can end up manipulating all the markets of the different economic sectors and is detrimental to the
growth projects of other companies.This is also detrimental to economic growth as a country because, if small or medium-
sized companies do not progress, a possible monopoly of large companies can be projected, which can end up manipulating
all the markets in the different economic sectors and is detrimental to the growth projects of other companies.

ENTREPRENEURIAL STRATEGY

In this aspect we are facing a difficult situation, because, if it is true that well-planned and well-argued strategies can become
great and potential sources of business and national growth, we must be realistic and analytical in the face of the lack of
interest of companies and individuals to form a company as they were built before, from the bottom up, because now the
approaches are more to pyramid companies, to the ease of social networks, to digital advertising or to the simplicity of
staying in the comfort zone of where they are.The focus now is more on pyramid companies, the ease of social networks,
digital advertising or the simplicity of staying in the comfort zone where young people or companies that may have brilliant
business ideas, but due to lack of economic resources or simple fear of failure, are located, we must be realistic and analytical
in the face of the lack of interest of companies and people to form a company as they were built before, from below.This has
really led to the failure of more than one company and to the fact that young people today are satisfied with a basic salary
without much effort, because the only thing that really motivates them is the security that a company can provide them and
NOT to take risks in order to achieve their goals.This decreases the possibility of job creation due to the lack of companies
that also stimulate the decrease of the unemployment rate of any country worldwide, because only by shaping the ideas can
generate a better country.

RESOURCES

This factor from my perspective is one of the most important, because, together with innovative ideas and economic growth,
the financial risks that can be incurred must be analyzed because in small and medium-sized companies there is NOT always
enough capital to invest in advertising, in machinery (if required) or in obtaining resources so that the company can increase
its potential in the economic sector in which it is located.In small and medium companies there is NOT always enough capital
to invest in advertising, in machinery (if required) or in obtaining resources so that the company can increase its potential in
the economic sector in which it is located and that is why they often need to request credits from suppliers or banking
companies to achieve their objectives.However, this risk is quite high, because the interest rates, the amortization terms vs.
the profits obtained from these new business strategies to expand the company, can make the banking companies to be able
to complete with these objectives.However, this risk is quite high, because the interest rates, the amortization terms vs. the
profits obtained from these new business strategies to expand the company, can make the banking companies fail to meet
these objectives, because the investments do NOT always achieve the budgeted profits and the company is forced to default
on these financial obligations, thus having to lose part of the company or the whole of it.

For this reason, the Government must implement greater economic aid to these companies that do NOT have sufficient
resources or the necessary financial muscle to take on all the economic risks that the business may entail in the medium or
long term.

MOTIVATION

This factor is very important, because, every day companies must reinvent themselves to maximize their business, labor and
social benefits in an economy that has become so dynamic in recent times, due to the high volume of growth in the
reciprocity that must be obtained when proposing growth or expansion strategies.For this, it is necessary to have a wide and
open vision to raise the diverse scenarios in which the company can incur, trying to minimize to the maximum the % of risks
in which it can be incurred, nevertheless, these thoughts of growth many traditionalist companies take it as a way of thinking,
and this is why it is necessary to have a wide and open vision to raise the diverse scenarios in which the company can incur,
trying to minimize to the maximum the % of risks in which it can incur.However, many traditionalist companies take it
negatively because they do NOT always have adaptation to change and do NOT take into account that daily market niches are
demanding a greater value proposition by the products or services offered and this can lead to a stagnation of the company
or sometimes a possible bankruptcy of the company.This can lead to a stagnation of the company or sometimes to a possible
bankruptcy, because their thinking is limited and they do NOT accept that they must evolve to survive in the market, thus
preventing companies from other countries from absorbing all the income that would belong to the country and prevent
them from taking it to their countries of origin as swallow capital.

The company must always evaluate new projects, taking into account the risks, benefits and be clear that thanks to these
evolutions the company can become more recognized in the local or global market to which it is directed, standing out
among its direct or indirect competitors, generating a win-win for the company and for the country.

b.- What role do resources play in the growth of the company.

What financial resources are available to SMEs for this purpose. Advantages and disadvantages. (Maximum
length: 2 sheets).

The role that resources play in the growth of a company is a priority because through the financial resources that
the company has or obtains, it can achieve the objectives to get more customers through advertising in various
media and social networks, it can also improve the conditions of the company's employees, provide greater
opportunities by creating jobs and provide training courses to our employees so that the company can achieve its
objectives.The company can also improve the conditions of the company's collaborators, provide greater
opportunities by generating jobs and offering training courses to our collaborators so that the company can bet on
certifications of the highest quality.s employees and customers, thanks to the benefits granted to both parties,
because the employees are the ones who make the company work together and make it possible for the company
to achieve excellence as a company, because the company is committed to the loyalty of its employees and the
loyalty of its customers, thanks to the benefits granted to both parties, because the employees are the ones who
make the company work together and make it possible for the company to achieve excellence as a company.The
employees are the ones who make the company work together and the customers are the ones who sell their
perception of the company through word of mouth, but it all depends on how they use the resources to obtain
these benefits in all areas of the company.

It should also be taken into account that when obtaining resources through bank loans or capital injections, it
should be borne in mind that these must be repaid within an established time limit with the profits obtained from
the use of these resources.

SMEs have various financial resources available to achieve their growth and expansion objectives in the economic
sector in which they operate. Among these, I believe that some of the 14 financial resources that are presented for
the expansion and growth of SMEs can be highlighted:

- Venture Capital Funds: This figure for SMEs can have as an advantage the growth of the company thanks to
the risk taken by the company that invests in the SME to obtain long term profits, however I consider that it
can be a risk for the SME, because the requirements for obtaining these resources are quite extensive and
are NOT for all SMEs, they are those that are in the growth stage and in addition to this the capitalist
partner may have participation in the formulation of the strategies of the SME with which it is risking its
capital and at the end of the exercise its objective is to obtain the reciept of the investment.In addition to
this, the capitalist partner can participate in the formulation of the strategies of the SME with which he is
risking his capital and at the end of the exercise his objective is to obtain the expected financial reciprocity,
which is always high due to the risk assumed.

- Participative Loans: With this figure the SMEs must have their own resources and greater than those that
are going to be provided by the loan, the advantage in these cases is that the SME is NOT intervened in its
internal environment by another external company, they must be very demanding as an expanding SME so
that their strategies can be well executed with the resources allocated and thus be the economic benefits
to continue in the market and the disadvantage are the interest rates that fluctuate depending on the
evolution of the loan.The disadvantage is the interest rates that fluctuate depending on the evolution of
the project that is being put into action.

- Crowdfunding: In this instrument of obtaining resources can be one of the most useful for SMEs, because it
is not necessary to resort to large companies or financial institutions to obtain such resources, because the
resources come from a known person, whether a friend, neighbor or relative to whom the new project
should be raised in the most realistic way possible with pros and cons of investing and so in the long term a
high reciprocity can be provided for that person who gave the SME the possibility to grow and progress,
taking into account that it may be an investment for the person to obtain a long-term profit or it may be a
donation so that the financial muscle of the SME is strengthened and has sufficient and necessary resources
to move forward in the new projects visualized in the medium and long term.

- Startup Incubators: This figure can be considered as obtaining resources and advice for the SME due to the
 fact that its main objective as a figure is that small and medium-sized companies can expand their reach in
the use of technological tools for their innovation and adaptation to new trends in the use of social
networks and media to make better decisions of which means to reach more quickly and a greater number
of customers.This figure can be considered as obtaining resources and advice for SMEs because its main
objective as a figure is that small and medium-sized companies can expand their reach in the use of
technological tools for innovation and adaptation to new trends in the use of social networks and media to
make better decisions as to why means to reach more quickly and a greater number of customers.

- Reciprocal Guarantee Companies: This figure can be considered one of the most powerful for obtaining
resources because they provide a wide possibility to obtain a tangible guarantee for the SME before the
financial entities to have greater credibility in its new project after analyzing its viability and NOT be denied
the resources for its expansion and growth of the SME in its economic growth projection.

According to the synthesis of some of the alternatives to obtain financial resources for SMEs, it can be seen that
despite the disadvantages that can be visualized of the alternatives that SMEs have at hand for their economic
growth, we can see that in everything there is always a risk, but for that there is the analysis of the feasibility of the
projects to be financed by the companies or people who wish to invest in SMEs, where we can see that the
strategies and projects must minimize the risks to the lowest possible % to be attractive to investors or to be
possible to finance to make a profit.We can see that the strategies and projects must minimize the risks to the
lowest possible % so that they are attractive to investors or that they are possible to finance in order to obtain a
profit or benefit in the long term and the SME can reach its objective of expansion in the market.

SMEs can achieve their internal objectives of promoting job creation, training of their employees, compliance with
the requirements for quality certifications in processes such as ISO 9001 and ISO 14000, greater expansion of the
company in social networks and the media, greater use and obtaining of technology resources so that adapting to
the change of companies in the 21st century is not an obstacle for them to continue strengthening their
competitiveness and efficiency in the market.The company's expansion in social networks and the media, greater
use and obtaining of technology resources so that the adaptation to change of companies in the 21st century is not
an obstacle for them to continue strengthening their competitiveness and efficiency in the economic sector in
which they operate.

The Government, despite the fact that it does NOT offer sufficient alternatives to SMEs for their growth, must
evaluate and improve the conditions of these companies because they are the ones that support many of the jobs
that benefit small and medium local producers and their main objective is their local and global growth in order to
achieve long-term exports of their products or services.Their main objective is their local and global growth to
achieve long-term exports of their products or services and the Government should provide security and economic
collaboration to these SMEs that generate these possibilities to these local producers or suppliers to obtain a win-
win benefit and thus become known for their quality and competitiveness in their target market niche.

I remain attentive to the corresponding feedback to continue expanding my knowledge and self-learning.

Thank you very much

DIANA DIAZ PATARROYO

Master in Finance and Financial Management