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What sources of financing for companies?

What sources of financing for companies?

Temps de lecture : 4 minutes

There's no shortage of sources of business financing: capital contribution, subsidy, bank loan, business angel, crowdfunding, factoring, leasing...

Entrepreneurship rests on a crucial question: what sources of financing are available to help your company grow? In this article, we'll explore in detail the various sources of financing available to entrepreneurs.

What is the primary source of financing?

The most common source of financing for companies is bank loans . Bank debt accounts for around two-thirds of total financing for French companies.

What are the 10 sources of financing for companies?

To sum up, here are the sources of financing available to entrepreneurs

Financing sources Benefits Disadvantages Suitable for these companies
Personal contribution Fast, straightforward, independent Not available to all, risk-taking Early stage
Love Money Fast Risk of conflict with family and friends Early stage
Autofinancement Independence Need to make a profit SME, growing freelance, service provider
Bank loan Non-dilutif Numerous guarantees required (some of them personal) PME
Crowdfunding (pre-sales) Market feedback, low risk Requires time and energy Early stage
Crowdlending Easier access to debt High interest rates Startup +3ans
Business Angel and investment fund No refund, open network Governance, dilution Any company with growth objectives
Subsidy and tax credit No financial burden Management, insufficient amounts Case by case
Honorary loan Very low financial expenses Selective Early stage
Affacturage Recurring, reassuring Expensive, many constraints (except with Hero) Toutes sauf early stage

Let's take a closer look at which ones are best suited to your needs:

Internal sources of financing

Personal contribution

Personal contribution is often the starting point for many entrepreneurs. It's your personal savings that you invest in your business.

On average, founders invest around €30,000 of their own capital (source: Ewing Marion Kauffman Foundation). This demonstrates your commitment and can facilitate access to bank credit.

Le Love Money

Love Money is money invested by your friends and family. They can be a valuable source of funding at the start of your entrepreneurial adventure. Learn how to solicit their financial support and show their confidence in your project.


Self-financing is based on your company's ability to use the profits generated to finance its growth.

Companies like Mailchimp, Atlassian, or Shutterstock in the USA, are inspiring examples of unicorns that didn't initially raise funds. Self-funded French startups include LemList, which turned down a major fund-raising round, as well as Superprof and Staycation.

External sources of financing

Bank loans

Bank loans are a common option for corporate financing. They account for around three-quarters of investment financing and one-quarter of cash flow financing in France (source: Fédération Bancaire Française).

Le Crowdfunding

Crowdfunding, whether in the form of donations, pre-sales, equity or crowdlending (participative lending), is expanding rapidly. More than 2 billion euros are raised each year through crowdfunding in France (source: Baromètre Mazars et Financement Participatif France).

Les Business Angels

Business angels are individual investors who provide financial backing for startups. Europe has over 300,000 business angels (source: FNBA). Find out how to attract their interest and explore inspiring case studies of startups that have benefited from their support.

Private equity companies

Private equity companies such as Sequoia Capital and Partech, offer substantial capital and access to a network of experts . However, they may have contractual terms to take into account. This is a suitable option if you wish to raise more substantial funds than with Business Angels.

Government funding sources


Subsidies, with an annual budget of 8 billion euros from local authorities (source: Cour des Comptes), can be a valuable source of financing for many companies. Find out if you are eligible for subsidies such as ACRE (exemption from social security charges for the first year), or start-up grants for businesses in free trade zones or priority urban districts.

Tax credits

Tax credits, such as the Research tax credit (CIR) and the Innovation Tax Credit (CII), encourage investment and innovation.

Honorary loans

Honorary loans These are offered by organizations such as Réseau Entreprendre and Initiative France, can vary from €3,000 to €50,000 . Rates are zero and there are often no application fees.

Which sources of financing are right for SMEs?

For SMEs generating profits, several sources of financing are available:

  • Reinvestment of profits

Reinvest profits to stimulate your SME's growth. You can boost this mechanism by investing in innovative projects and reduce your tax burden with the Research Tax Credit.

  • Asset disposals

Disposing of non-core assets can free up cash to finance growth.

  • Factoring

Factoring involves selling your invoices to a third party to obtain advance payments. However, the banks that offer this service are fairly restrictive: you have to commit to a timeframe and to all your invoices. There is a notice period for stopping factoring. Rates are fairly high. Above all, this option is often reserved for SMEs of a certain size.

Alternative sources of financing for SMEs

Hero allows you to finance your invoices in an instant There's no size limit and no obligation. You choose which invoices to finance, and are free to cancel at any time. Hero takes care of collection, freeing you from time-consuming management so you can concentrate on developing your business.

Request a customized quote

What sources of financing are available for business start-ups?

If you are considering start your own business Here are three suitable sources of financing:

  • Personal contribution and love money Use your personal savings and ask friends and family to finance the project. This shows your commitment and can provide initial funding without relying on third parties.

  • Le crowdfunding It allows you to raise funds from a community of investors who believe in your idea. This option can also validate your concept and create a customer base.

  • Government subsidies Find the right grant programs for your sector or region. Grants offer non-repayable financing, ideal for early-stage start-ups.

In the complex world of corporate financing, it's essential to diversify your sources of funding and choose the one that best suits your needs and stage of growth. At Hero We are committed to offering a flexible, accessible and competitive cash flow financing solution tailored to the needs of digital SMEs.

Request a customized quote

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Écrit par

Valentin Orru

Head of growth