Raising funds for the business is not always easy and it is important that others too have faith in your vision as much as you do. However, professional lenders will look through a lot of parameters before they feel confident to trust you with their money. In due time you will have to return the money back to them and they would want to make absolutely sure that your business is up for it. There are a number of funding options to raise capital for your business but it is important to find out which method is the best for you.
- Business loans: This is the most secure method of obtaining financing and you can get the loan from banks or NBFCs. These are term loans that are mostly utilized for business purpose. The business loan rates is mostly between 12% and 18%, depending on a number of factors. The money has to be repaid with interest by the end of the tenure but more or less the cash is enough to take care of all aspects of your business. Bajaj Finserv has special Flexi loans for business where the tenure is sufficiently long and one can make the repayment according to one’s convenience.
- Asking from friends and family: Well, this still looks like the easiest and the most plausible method of gaining financing. Our family will always stand by us and by combining your own cash reserves as well as acquiring the extra money through their help, one can get a sizeable amount for one’s business. However, the pressure to succeed in such cases is a lot more, since you have the additional responsibility of living up to their expectations.
- Crowdfunding: Thanks to the internet, it is quite simple now to gain financing from like- minded people through the internet. Crowd funding platforms are doing quite well and if you can pitch your business idea well, people from all over the world can donate for your business. They can donate very less but just by reaching out to a large number of people, you can collect a good sum. There is no need to return this money either but you can always show your appreciation towards them with a reward when your business succeeds.
- Working capital loan: A working capital loan is also a kind of business loan and it is mainly opted for by the businessmen when they want to tide over a particularly slow time in the business. It is a fact that production is often not the same throughout the year and nor are the sales always high. However, some basic expenses like maintenance of the premises, its rent, paying for the security, paying the salary of the employees, and some other basic expenses will always have to be met. With the help of this loan, these basic expenses can be met and the loan can be repaid when the next peak season arrives and the sales go up again. In fact, if you successfully pay off the first loan, applying for a similar loan the next year becomes easier. The same can be said of line of credit which may be used in similar fashion.
If you are looking for business finance from trusted lenders like banks or NBFCs, then you should check out the SME and MSME loans from NBFCs. The loan value can go up to Rs 30 lakhs and the financing can be obtained just by submitting two documents.