Benefits of Seeking Offshore Funding
Still struggling to obtain the necessary venture capital to launch your business? It’s no secret that the U.S. banks are lending less money, and less often, in the wake of the housing market crash. Previously, nearly anyone could obtain a loan, regardless of his or her credit score and revenue. However, banks are now taking a more cautious approach towards lending, making it difficult for entrepreneurs to turn their ideas into a reality. So, is offshore funding the solution?
Offshore Funding Regulation
One of the key benefits of offshore funding is the simple fact that it’s less regulated (when compared to on-shore funding). As previously stated, banks now under heavy pressure by the federal government to selectively choose to whom they lend. And when there’s greater government oversight, it slows down the lending process. You can bypass such problems, however, by seeking offshore capital for your business. Granted, most countries have at least some sort of banking regulation, but it’s typically less strict than here in the states.
Easier To Obtain Capital
Offshore funds are generally easier to obtain than on-shore funds. Again, this is due to the fact that U.S. banks and financial institutions are lending less in the wake of housing market collapse. Financial institutions in other countries are often more willing to lend capital to entrepreneurs, meaning you can spend more time growing your business and less time worrying about the finances. Entrepreneurs with “high-risk” businesses often choose offshore funding for this reason alone.
A lesser-known benefit of offshore funding is the confidentiality it provides. While each and every country has its own regulations, many of the top countries for venture capital have laws in place which protect the identify of corporations and banking confidentiality. Of course, you’ll want to check with the offshore bank to determine whether or not your information will remain confidential.
As the saying goes, never put all of your eggs in one basket, holds true in the realm of venture capital. Rather than obtaining funds strictly from U.S. banks and financial institutions, you can mitigate your risk by seeking offshore funds as well. Diversifying your venture capital will ensure your business has the necessary money to operate, even if a bank fails to deliver the promised funds.