Small businesses are financed with own funds

Theoretically speaking, a young person who wishes to start his or her own business has a choice of several financing options: personal savings, bank loans, private investors, or European funds. However, practically, in most cases financing comes from own funds or consumer loans, according to business people quoted in the “Antreprenor” supplement of Business Standard.

This is the case for businesses providing services or e-business, which do not many assets. At the other end of the spectrum are businesses with real financing opportunities, such as trade, production, transportation and construction.

“Banks do not offer loans without mortgage guarantees, two years experience in the business, good turnover and profit. Young entrepreneurs are stuck,” says the founder of Power On Global, Loredana Manolache.

If the business is developed on the internet, chances of obtaining a loan are even smaller, because Romania does not have a culture of financing through investment funds with risk capital to target start-ups.