For a long time, when thinking about ways to raise funds to undertake or grow a company, it was almost forbidden to talk about bank loans .
After all, it sounded risky to have a business of your own that naturally cannot guarantee success – no matter how good the industry is – and assume a heavy bill to pay for years.
A few decades ago this thinking changed, with the greater supply of credit for different business profiles and the breaking of the taboo that we only use borrowed capital to save a company.
A bank loan can be an inducement to undertake, but it requires a more present and effective administration to reduce surprises as much as possible and not support 100% of the business capital in bank credit .
There are innovative ways to raise capital without compromising the future; one of them is tokenization , which helps fund projects, promote growth and balance finances in times of crisis.
Many people still don’t know business tokens to compare with bank loans , understand advantages and risks and make your choice.
In this article, BLOCKBR will talk about them and help you decide!
WHAT ARE BANK LOANS?
Loans in banks are financial operations in which the institution delivers an amount that must be returned by the customer under the agreed term conditions, plus interest, which is charged over the term of the loan .
Bank loans and loans are different in two important ways:
- Destination : the destination of the value is a condition in financing – for example, real estate credit – which does not exist in loans;
- Guarantees: in financing, the assets are alienated, while in loans, the most common is the judicial execution of the debt.
For these reasons, bank loans have higher interest rates and shorter terms.
WHAT ARE THE ADVANTAGES OF A BANK LOAN?
AVAILABILITY
All financial institutions offer credit to companies and this is an important differential, especially when the objective is urgent, such as balancing cash or paying off an unexpected debt.
The terms are historically longer – it is a way to better dilute the value of the installment but the time of indebtedness also needs to be evaluated, which will impact new operations.
UNIVERSALITY
Loans are a form of fundraising available to companies of all sizes and segments, which is positive for small and medium-sized entrepreneurs to participate in the market.
This increasing participation ends up helping existing companies, as banks will make more consistent risk assessments, being able to improve conditions when they want to promote business in a certain sector.
CREDIT WITH DENIED CNPJ
Unlike financing, which requires the CNPJ to be positive, there are currently several financial companies that lend money to negative companies .
This is a good opportunity to raise capital to pay off old debts and clear the company’s CNPJ, which often fails to do good business because of the negative.
WHAT ARE THE DISADVANTAGES OF A BANK LOAN?
HIGH COST
This first disadvantage is nothing new for Brazilians, as we have historically had the highest interest rates in the world. The entrepreneur must be aware of the financial cost embedded in the loan and the real ability to meet the payment commitment .
RISKS IN LONG TERM COMMITMENT
The loan is a financial commitment for a few years and in the meantime a lot can happen – economic or sectoral crises, loss of market and bad decisions in the company.
The company must carefully evaluate the risks and if they are not threatening the investments with the loan , leaving the gains along the way with a long bill to pay!
INDEBTEDNESS
The level of indebtedness will compromise the acquisition of new loans for years, until the company demonstrates that it can borrow again and can be an obstacle to closing deals, especially of great value and complexity.
WHAT IS ASSET TOKENIZATION?
Tokenizar ativos, projetos, estoques, recebíveis e outros itens significa criar representações digitais e criptografadas e negociar no mercado ou ofertar a investidores através de uma blockchain, conforme o objeto a ser tokenizado.
This strategy has become increasingly popular because of its versatility of use within companies. The purposes can be many, including:
- IPO (shares);
- Trading of physical, financial and movable assets;
- Offer of investment in company projects;
- Anticipation of receivables and securities portfolio;
- Sale of future rights (crops, mineral production and others);
- Creation and management of customer relationship programs.
In this way, the company defines ways of raising funds with planned conditions and aligned with the business.
Have you heard about the smart contract , the brain of tokenization?
WHAT ARE THE ADVANTAGES OF ASSET TOKENIZATION?
PROACTIVE FUNDING STRATEGY
This is the main advantage of tokenization when compared to bank lending ; rather than being a passive operation, which depends on third-party approval, tokenizing is a proactive strategy of the organization.
As a result, the company is completely independent to dispose of its assets and rights, define the rules for raising funds and obtain what can be measured individually.
WITHOUT INTERMEDIARIES AND COSTS
This is an essential advantage in times of so much competition and the need to reduce costs; the tokenization process is done without third-party intermediation and its costs.
Unlike loans with banks and financial institutions and their fees – and especially interest – tokenization is P2P – directly between the company and those interested in investing or buying.
This reduces the total cost of operation , making tokenization financially attractive.
DEMOCRATIZATION IN ACCESS TO TOKENIZATION
All companies can tokenize , regardless of their activity and size, which opens doors for those who believe that tokenization leverages business or balances their finances.
For the market, the fractioning of the object to be tokenized is the great differential, as it allows small investors to participate in operations and not just traditional large investors and groups.
The results: faster and more liquid funding processes!
TOTAL AVAILABILITY TO INVEST
Tokenizations are offered and managed within the blockchain, an ecosystem that also creates and moves cryptocurrencies and that works uninterruptedly and without barrier so that people from other countries can invest.
In this way, the company’s processes again gain in speed and return of results!
WHAT ARE THE DISADVANTAGES OF ASSET TOKENIZATION?
IT IS NOT INVESTMENT FOR THE ISSUER
Here we have more of a different view than a disadvantage for token issuers , as this process does not have the appeal of investment, it should be thought of as a strategy to raise funds , win customers, leverage sales and increase revenue.
DOES NOT APPLY TO ALL ASSETS AND RIGHTS
Tokenization is not a process aimed at all types of assets, rights and goods. Due to its development, offer and control characteristics, it is necessary to assess whether there is a good cost-benefit ratio for the object to be tokenized.
IT IS NOT A SHORT TERM OPERATION
Tokenization adds innovation value to the object, contributes to profitability, attracts a qualified audience that recognizes its benefits and everything at a higher speed than traditional sales and offer processes.
On the other hand, it is not designed to deliver results in the very short term, like the two or three days of a loan.
Companies investing in tokenization should enjoy the ongoing benefits it will bring to their business in the short, medium and long term!
BANK LOAN AND TOKENIZATION: WHAT WE HAVE CONCLUDED
When comparing tokenization and bank lending , the differences are evident; while lending is a passive solution, tokenization is a business strategy .
Tokenizing allows you to explore commercial and marketing potential in the search for new sources of revenue, while the loan delivers a credit with a long-term liability .
With tokenization , experiences can be transformed into new business models and generate positive impacts on the company’s image .
Do you want to know the advantages of using tokens in your company’s processes?
BLOCKBR Digital Assets is a fintech that combines technological innovation and digital knowledge to transform physical assets into digital ones, in the asset tokenization process.
The offer of tokenized physical and financial assets, both current and new, is democratic and decentralized, which makes investing safer, simpler and more efficient.
We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.
Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?
