How Politics Affects Business Financing

Do you think you know much about politics? Well, you may not know as much as you should if you don’t understand how well politics affects business financing. While it’s easy to see how businesses can influence politics and government, politics may shape business funding in ways you can’t imagine. So, let’s crunch the data for you.

Business financing is how companies get funding for their activities. Most businesses look to banks, credit card companies, and venture capital for funding. Other businesses may adopt crowdfunding or even angel investing to achieve their financing aims. Nevertheless, politics can significantly influence companies that provide funds by drawing these funds to candidates and political parties.

First off, it is essential to know that these funding companies cannot directly donate to electoral candidates. So, banks as funding institutions use political action committees (PACs) to channel their contributions on behalf of candidates and parties. On the other hand, credit card companies also come into play in politics and business funding.

Generally, credit cards provide funding through personal cards or credit scores on business cards, for example. This possibility allows credit card companies to donate to political campaigns through individual accounts or PACs.

Venture capital companies draw money from organizations that they later invest for business funding purposes. However, angel funding stems from wealthy individuals who choose to finance business. Most of the funds from business financiers also go to lobbying. As a result, businesses may not get sufficient funding in the wake of political events as funding may be along political lines.