5 Methods To Fund Your Startup
Starting your own company? You know you will succeed because you have a terrific concept and the determination to do so. But, have you ever considered the money or finance needed to convert your dream into reality? No matter whether your start-up is a huge corporation or an MSME of any kind, it will always require financial investments. Funding gives your business projects a solid foundation and aids in their expansion and further growth.
Looking for capital for a startup firm can sometimes turn out to be a difficult and time-consuming endeavor. However, to make things easier for you, we have developed a list of several crucial financial strategies that will aid you in obtaining those essential funds for your business.
- Self-Finance your Start-up Business
Whenever you are starting your business, you will obviously have to invest from your personal account in your initial stages. However, before starting any business you will first have to ask an important question yourself, how much capital it might take to launch a start-up and streamline its operations. There are always some options of taking a loan or approaching a venture capitalist, the wisest course of action for new business owners is to invest their own money. In the initial stages, there can be a lot of risk factors, which implies that the banks might get reluctant to give a substantial amount as a loan.
Whereas, lenders won’t have a justification to reject your request for a business loan. While your company is in its later phases, they will take into account the stability of your company as a low-risk criterion.
- Finding an Angel Investor
Anyone having a bunch of surplus cash can be referred to as an angel investor. These angel investors usually look forward to investing their money in various innovative Indian startups or anything that might have the potential for growth in the future. However, before moving forward you have to keep in mind that partnering with an angel investor might have some risks, as they generally look for higher returns. But, when compared to banks, getting those investments is a bit easier as they usually have a lot of surplus money. It means you will just have to pique their interest in your business, and you will be good to go.
- Look out for Crowdfunding
The idea behind crowdfunding is to raise money from a large number of investors through online channels like social media and business-focused websites. Online fundraising web portals raise money for a range of other causes, organizations, projects, celebrations, disaster assistance, etc. With enough marketing and brand awareness it can be an ideal source of capital for new businesses or first-time entrepreneurs.
- Apply for Loans under Government Schemes
The government has done a lot to support the startup culture in India. If you will search thoroughly, you will find a lot of different loan options for startups or businesses in their early stages. However, the total loan amount will depend on a lot of different factors, such as your annual turnover, your monthly sale, or the overall security of your business. While applying for these types of loans, you have to make sure that all your paperwork should be neat and clean to avoid any unnecessary delays.
- Get Loans from Private and Public Sector Banks
For start-up businesses, banks are viewed as the top priority because they are one of the most dependable and practical sources of funding. The two types of financing that banks offer to new businesses include term loans and working capital loans. Almost all public and private sector banks can provide loans for new businesses in India. However, the interest rate, the total loan amount, or the time given for paying back the loan might vary depending on the bank.
As business owners, you all can agree that there are a lot of things to take care of while starting a business. Apart from managing heaps of paperwork, you will have to build a skilled team, take care of the resources and streamline all the workflows. However, there’s one thing without which you won’t be able to move an inch, and that is capital. Without proper financing, you can invest freely in product development, which is very essential for any startup. Therefore, make sure to go through the points given in this article and start securing those sources of financing for your business.