You might have a great idea to start a business and have the potential to succeed but ever thought about the finances required to fulfill your imagination. Launching any business requires financial investment whether it’s a startup or large corporate enterprise. Moreover, finance is the bloodline of every business. Without adequate finance, start-ups tend to obstacles and would lead to backing from start-ups.
Here are the top 5 funding options to raise capital for your startup business:
Several business owners practice this type of method to raise capital, personal investment or self-financing known to be the best way to finance your business. If you are looking for bank loans or venture capitalists, you will be asked to answer how much capital is required for investment and what your projected financials would be and so on. Funding your own savings is the best option for new startups. However, after a few years of business existence, you can opt for a business loan and get easy funding as your financial stability will be increased.
Individuals with high net worth are known as angel investors, who have surplus liquidity and a keen interest in investing in great business ideas. Usually, they invest in new start-ups in India. Angel investors carry a high risk of investment. Therefore, angel investors preferred to invest in higher returns on profit projects. They will offer mentorship alongside capital funding for startup businesses. India’s leading angel investors are Hyderabad angels, Mumbai angels, Indian angel network. These investors have invested in many successful startups business. Angel investors helped to start up many prominent companies including g yahoo, google and Alibaba. You can also approach such investors for funding assistance.
The Indian government has initiated various loan schemes to benefits startup enterprises, SMEs, MSMEs and other business units. It includes women entrepreneurs, small-scale industries (SSI) and individuals from SC/ST category. Under the business loan from government schemes, you can be benefited from the MUDRA loan scheme, Standup India, Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE), Pradhan Mantri Awas Yojana, Start-up India...etc.
Crowdfunding is an ideal platform that enables individuals to pitch their business ideas and allows them to collect funds from multiple investors via social networking and web-based sites built for business-related purposes. The crowdfunding concept aimed to raise funds not only for first-time entrepreneurs but also to cover purposes like social causes, disaster relief, charities, events..etc. If your ideas are brought by crowdfunding on its platform, they will pledge to support your business model and donate funds respectively. Some of the leading crowdfunding platforms include fundable, fueladream, Kickstarter, ketto and much more.
Business credit cards are an effective way to manage your business expenses. It can be the quickest way to secure finance. At the early stage of the startup, businesses don’t have tons of expenses. Therefore, you can use a credit card for transactions and make timely payments. Make sure you limit the usage of cards up to 30% of the actual limit, by doing so – debts and additional interest rates are saved.
Considering the above information can greatly increase the chances of setting up or expanding a business. However, to boost your liquidity you must keep changing your funding sources. This will enhance the level of flexibility and reduce over-dependence on one source of funding.
Also Read:- How to get a business loan by government?