What does the traditional financing model mean?

Traditional financing methods refer to the traditional methods adopted by enterprises to seek financial support, such as bank loans, stock financing and bond issuance. These financing models have a long history and are widely used in the operation and development of various enterprises.

The most typical financing method is bank loan. When an enterprise obtains a bank loan, it needs to provide the corresponding guarantee materials to the bank and bear certain loan interest in order to obtain short-term or long-term financial support. The advantage of bank loans is that the procedures are simple and quick, and at the same time, the flexibility is high, so both the business operation and the expansion plan can be strongly supported.

However, with the continuous development of market economy and the continuous innovation of financial business, more and more new financing models appear in turn. These models include equity crowdfunding and internet finance. Compared with traditional financing models, they have lower threshold, higher efficiency and more diversified investment options, and become the first choice for many small and medium-sized enterprises and startups.