Every business owner needs to budget the funds needed to launch their project, but also to keep the business running smoothly until it generates a profit, or if there's a temporary downturn.

The digital revolution and the expansion of means of communication have allowed for a great diversification of financing methods: in order not to put all your eggs in one basket (especially in business!) we will here focus on the different financing methods available to launch your project in the best possible financial conditions.

External financing: crowdfunding, business angels, love money, venture capitalists

Crowdfunding, also known as "participative financing," is a method of financing that involves appealing to a large number of people to raise funds via a platform. The project is financed through the accumulation of numerous donations from individuals or institutions.

Sometimes it involves a call for donations, where investors may be compensated through rewards. Some platforms set up peer-to-peer lending between individuals seeking funding and investors at reduced rates.

Also, "Equity based" financing involves taking a stake in the company, where the investor becomes a shareholder in your business.

Business angels not only help you raise funds, but also give you real operational support to get your project off the ground. The skills, advice, and contacts you get are invaluable for making the right choices and boosting your company's growth potential.

Being in contact with a business angel is also an asset to access other sources of funding.

Love money refers to capital provided by friends, family, or relatives to help a project leader. As an alternative to bank loans, loved ones receive shares of the company in return for their financial effort. It is important to note that loved ones can benefit from significant tax advantages.

Lastly, venture capitalists invest in venture capital funds, which are used to finance research and development activities and the launch of new companies. You can access them through dedicated funds on the markets.

Internal financing: release of capital, share capital

The business owner is theoretically the first investor in their own structure. You can opt for equity financing, i.e. directly through your savings, or by depositing assets as collateral.

Capital release refers to the payment in cash of all the shares subscribed in a company at the time of its creation. Originally, they can be subscribed in cash or in kind.

Once the capital has been deposited into a secure bank account, it will be released after you get your Kbis extract.

The company can then use these funds for its operation.

Current account contributions involve putting money into a company, but it doesn't go towards the share capital.

Bank financing

Bank loans are a very common solution for business owners. The company receives a sum of money that it repays in several installments, along with additional interest.

Bank loans make it possible to obtain new financing without the partners or shareholders seeing their share of capital decrease, or needing to invest more.

However, it is common for the company to be forced to repay its credit before it has even been able to generate profits.

Getting a loan sometimes requires significant guarantees that are hard to come by.

Government funding

Some French companies are eligible to receive government funding.

Funding is provided by the Public Investment Bank (BPI France). You can also get extra financial aid by contacting the Chambers of Commerce, Pôle Emploi (French public service for employment), or entrepreneur networks like Initiative France or BGE.

Companies can also get social or tax benefits. These vary depending on the company's business sector.

For example, new businesses that start an industrial, commercial, craft, or professional activity in a regional aid area (AFR) get a tax break on their profits.

Rural revitalization zones (ZRR), urban free zones (ZFU), and employment areas needing revitalization (BER) also offer a tax exemption on profits for 5 years.

Business founders can apply for ACRE, a social measure that reduces social security contributions.

Faced with the vast quantity and complexity of existing systems, it is not always easy to turn to the right contacts.

What's more, the burden of administrative formalities can discourage many business creators. Everyone has to make their choice, mainly based on the needs of their business and their profile, to ensure the best possible funding for their activity.