Sales and financing

Do not price your product or service to low!

• Financers increasingly aware of the need the circular transition
• But still a lack of understanding
• Need for awareness of the:
  • risks if we do not make the transition
  • returns of making the circular transition

Participation (Equity)

• capital is provided in exchange for a participation in the company 
• (part of the ownership)
• Participation is therefore a form of equity

Loans (debt)

• Debt financing is provided in the form of a loan that is repaid in instalments or in full, including
• examples:
  • crowdfunding
  • leasing finance
  • impact loans

Public funding

• various policy instruments that can (financially) support the transition to the circular economy. 
• indirect financing:
  • fiscal instruments /  subsidies / purchasing policy

• direct financing: 
  • guantees / loans / participation

• Financial flows that change
  • Longer payback period, more working capital needed but also more collateral available
• Dependence that increases
  • Impact if one partner unable to supply?
  • Dependency on customers (can they pay longer for the service?  do they take care of the product?)
• Risks that become more complex
  • Pioneering + increased dependency -> accounting and legal challenges/costs

Due to a lack of understanding financers might see a circular business as more risky