Financing: 5 alternatives to classic credit

Financing without a bank – A financing concept is only coherent with the house bank, but that alone is no longer enough these days. It should also offer other financing options. The DHZ shows which alternatives are suitable and when.

By Sabine Hildebrandt-Woeckel

Leasing as an additional financing option has long been standard. This option is also becoming more and more popular for machines. – © Anselm –

Liquidity and financing are essential for companies. In addition to the house bank, there are many other financing options that often remain unused. Financing is also possible without a bank. and the house bank is not always willing – and it is not always the best solution for a loan.

According to Maier, many credit institutions are hesitant, especially with smaller amounts of 20,000 to 25,000 euros. The effort is high and the margin low. Depending on the actual needs, there are more tailored solutions, which are often not well known or appear too complex.For the sake of simplicity, many then switch to the overdraft facility, almost always the most expensive solution, almost all experts agree on this. Unless it is used in a very targeted manner, for example to take advantage of a discount, as management consultant Carl-Dietrich Sander explains. But what alternatives are there?

Leasing – common, but not easy

Of all financing options beyond the house bank Leasing is most common in trades. This applies to vehicles anyway – but leasing is also becoming increasingly popular for investments in machines. Although the Federal Association of German Leasing Companies does not differentiate its figures according to trade, it does The share of production machines in all project groups is constantly increasing. In 2012, new leasing business in the production machinery sector was around EUR 5 billion, in 2020 it was EUR 8.12 billion and last year it was EUR 8.34 billion.

And indeed leasing has an enormous advantage as emphasized by Carl-Dietrich Sander. In particular, because leased objects belong to the leasing company until the end and not burden your own balance sheet. This has a positive effect on the rating, i.e. on the further creditworthiness. There are also tax advantages.

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However: Right now, leasing is significantly more expensive than the classic annuity loan. So whether the calculation works out in the end always depends on the individual situation, how it fits into the company’s overall financing concept and the exact form of the contract.

As a rule, however, so-called residual value contracts are concluded in the trade, where you can take over the leased object at the end of the calculated final amount. So that no mistakes are made here, which could end up being expensive, management consultant Stefan Maier recommends always looking for a provider who is not only familiar with leasing, but also with the special requirements of the trade. Alternatively, there are also option contracts in which a possible purchase decision is only made at the end of the term. This is particularly useful if someone wants to react quickly to innovations.

You can find an overview of leasing partners who are suitable for trades at

Venture capital – little knowledge, little interest

In principle, says Holger Zervas, Managing Director of MBG Schleswig-Holstein, the topic can also be of interest to tradespeople. Despite this, interest is still lower than in other industries, even if it is “has increased moderately” over time. There are several reasons for this. On the one hand, there is the fear of the investor interfering in day-to-day business. However, this is not the case with “silent holdings”, as is almost always the case in the trades.

On the other hand, there are the significantly higher interest rates, or – as it is correctly called in banking German – interest-like participation fees. An objection that, as with leasing, can only be refuted by the fact that the Strengthening of the equity ratio other positive aspects. It will be like this easier and cheaper to get more credit and the conditions for leasing or factoring are also getting better. In addition, no security in rem is required. Zervas knows that private equity can be a good solution, especially when it comes to company transfersbe g. And this is where it is used the most in the trades.

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And then there is the assumption that the donors will only get involved when the amount is in the millions. That too is wrong. Holding companies such as MBG Schleswig-Holstein start at 50,000 euros. On average, according to Zervas, the investment sums of the MBG in the craft are 200,000 euros.

Crowdfunding – difficult term, clear benefit

To put it very simply, crowdfunding is about raising money for a specific project through an online funding platform. It gets more complicated when you take a closer look at the topic. In fact there is very different forms of swarm financing, which are not clearly differentiated from each other. This starts with collection campaigns for social projects (crowd donation) and extends to investments (crowd investing).

Nevertheless, according to financing expert Sander, the topic can also be interesting for the trade. Both the so-called credit-financed crowdfunding (also crowdlending) and crowdinvesting “can be an alternative”. In the first case, the crowd provides the required sum over a fixed term and at an agreed interest rate. In the second, the swarm participates financially in the success of the project, mostly via subordinated loans.

Both are more expensive than the classic loan, but but no collateral is required and it is often faster. Sander believes that dealing with the subject should become more a matter of course in the trades.

Factoring – fast help, more and more often

Financing experts know that the factoring industry still has a bad reputation today – and often wrongly so. Because actually he can Selling invoices may well be an alternative. In particular, if high outstanding amounts would otherwise lead to sales pre-financing via the overdraft facility, as management consultant Maier emphasizes. Accordingly, he finds it positive that most companies have opened up to crafts in recent years after initial hesitation. Depending on the agreement, the company receives 60 to 80 percent of the outstanding amount immediately.


Finetrading – few providers, a lot of skepticism

In craft businesses with extensive use of materials, the pre-financing of materials often ties up an enormous amount of liquidity. This is where so-called fine traders come in. The term is composed of “finance” (finance) and “trading” (trade) – and means, that the relevant companies pre-finance the purchase of materials. You pay the supplier after deducting a cash discount and then “sell” the goods to the company with an extended payment period of between 60 and 180 days.

Since no money flows directly into the company in this way, it is not a loan in the narrower sense, but it still helps with financing. So far, it has hardly played a role in handicrafts. On the one hand, this is due to the fact that there are still hardly any providers who address the industry at all, on the other hand, the topic has so far been viewed with skepticism in the companies – also because the effort is often great.

There are now providers who have digitized the process. This is no more difficult for the customer than online banking – and the money is in the account within 24 hours. Anyone who has been activated for a financing line can use it again and again. There is a credit check, but it is based on different criteria than banks. Stefan Maier believes that before you turn on Finetrader, you should first optimize your own business processes – “and then collect the discount yourself”. In principle, however, there can definitely be situations in which finetrading is a viable option, especially for large craft businesses. The same applies here: it is always better than a long use of the overdraft facility.

In an interview, management consultant Carl-Dietrich Sander explains what role the house banks play and what is essential to the financing concept.