Starting a new business? Well, you are at the right place to get answers to your doubts. Whether starting a new venture or running an existing business, every venture requires funds to run it successfully. Funding makes your business’s base strong and helps to grow further. Arrangement of fund for startup sometimes become challenging. However, to make it easier, here are some of the ways to finance your business.
Self Financing
Self Financing is the best plan of action when it becomes hard to convince others to invest in your startup. Every business involves financial risk, but it is observed that those who are using their own saving to invest in the business have more percentage of success. Moreover, investment of own money into the business makes the entrepreneur more serious and committed to the business.
Check your savings and figure out how much you can utilize in the business. While investing, take care that at least you should have a balance for the upcoming year to meet the financial requirements.
Business Loans under government schemes
The next best option is business loans from the government. The government of India has launched many loan schemes to benefit startups, MSMEs, SMEs, youth, women entrepreneurs, cottage industries, etc. These loans also help to promote the socio-economic position of the entrepreneurs. Some of the business loans provided by the government of India include MSME Loan, Pradhan Mantri Mudra Yojana (PMMY), Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGFMSE), National Small Industries Corporation (NSIC), and Credit Linked Capital Subsidy Scheme (CLCSS).
Crowdfunding
One of the new ways of finance nowadays is via social networking sites. Crowdfunding is sourcing a small amount of capital from different individuals. This idea is good for getting finance for startups or new businesses in no time. Generally, an investor chooses to contribute according to his/her affordability.
Angel Investors
Angel Investors are wealthy private individuals focused on financing small businesses in return for equity with higher returns. Angel investment is not similar to a business loan as there is more risk, and borrowers need not pay the capital invested within the specified time. Therefore, before approaching angel investors, one needs to prepare a strong business plan.
Bank Loans
Bank loans are the most common source of finance for startup enterprises. One can choose short-term or long-term business loans as per their needs. Banks provide two types of loans Term Loans and Working capital loans. Almost every bank provides loans for startup enterprises against collateral.
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