Wednesday November 13, 2019
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Funding Options to Raise Capital for Your Business

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.

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Thanks to the internet, it is quite simple now to gain financing from like- minded people through the internet.

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.

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    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. Pixabay
  • 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.
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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. Pixabay

Also Read: Vatican May No Longer Allow Bishops To Escape Sanction Who Cover Up Clergy Sex Abuse Cases

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.

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Payday Loans: Why They Have a Bad Rep and How You Can Benefit From Them

There are payday loan companies out there that have mistreated their customers in the past that people just assume that all the companies are like that

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Payday Loans that ask you for money upfront are more than likely going to be scams. You might see them listed online as advance fee loans and these are notorious internet scams that have cost lots of people money that they’ll never get back. Pixabay

Whenever financial emergencies come up, the most reliable and, pretty much guaranteed way of getting money fast, is by way of getting a payday loan. The process to get money in your time of need is so easy… you can apply and qualify in minutes! So, if Payday Loans are so awesome in helping millions of consumers in their time of need, why has it gotten such a bad rep?

Well, you know how in certain situations, all it takes is one person to mess things up for everyone else? That’s how the payday loan industry got such a bad reputation. There are payday loan companies out there that have mistreated their customers in the past that people just assume that all the companies are like that… It’s more so the unlawful acts that made people turn away from payday loans.

Unlawful Acts of Payday Loans

Some of the unlawful acts that have been done to customers include:

  • Not fully disclosing all the terms of the agreement
  • Tacking on excessive interest rates
  • Requiring money upfront

Payday loans that ask you for money upfront are more than likely going to be scams. You might see them listed online as advance fee loans and these are notorious internet scams that have cost lots of people money that they’ll never get back. According to fraudguides.com, the way advance fee loans work is the victim will agree to pay a “finder’s fee” before getting the loan. 

In order for the deal to be sealed, the victim will have to sign a contract and within the contract, there is language and lingo that the victim will agree to pay that fee when they know the source of where their funds will be coming from. It’s not until they pay the “finder’s fee” that they learn that they are disqualified to receive the financing they need.

There obviously scams all over the world… there were actually 5 scams that really shook India back in 2015 but the bottom line is that with scams, if something is too good to be true, it probably is. Just pay close attention to what the qualifying requirements are and if they seem suspicious, look for something else… you shouldn’t have to pay money when you need it.

Why Payday Loans Have Gotten Such a Bad Reputation

Customers aren’t fully aware of all the terms of the loan agreement

This area was touched on earlier but to be fair, the reason for this can go both ways. It’s easy to say that the payday loan representative did not disclose all terms of the loan agreement with you but is that really the case? Sometimes the reality of why people find themselves in more debt than they bargained for is because they weren’t fully paying attention to the terms as the payday loan representative was stating them.

It’s very easy to do. The representative could be disclosing everything you need to know but you have this financial burden weighing heavily on your mind that you don’t even hear what the terms of the agreement are… you just simply “sign here” and “initial there” so you can get the money you so desperately need.

Now, it’s very possible that a payday loan company purposely didn’t disclose everything with a borrower simply because they want to get money but lenders are required by law to disclose everything in the loan agreement, including the repayment schedule and interest rate.

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Whenever financial emergencies come up, the most reliable and, pretty much guaranteed way of getting money fast, is by way of getting Payday Loans. Pixabay

The interest rates tend to be higher

Okay, so payday loan interest rates are quite high but you have to look at what you’re paying for in your interest rates… you’re paying for convenience. With payday loans, you’re getting the money you need almost instantly and they don’t do credit checks. So people with bad credit can get approved… if you were to go to a regular loan company, you would immediately be denied due to having bad credit and even if you had good credit, it could take weeks for you to get the money you need, depending on how much you’re asking for. 

So, before you continue on a rant about how bad payday loans are, remember what you’re you’re actually getting; you’re getting the money you need immediately and without a credit check.

Borrowers misuse payday loans

It’s not always the lender’s fault as to why you had a bad experience with payday loans… sometimes you’re to blame because you weren’t a responsible borrower. People don’t fully understand the purpose of payday loans… Payday loans are meant to be used for emergency situations to bring financial relief to those who need it. Instead, people use payday loans to pay for vacations and to buy expensive items. 

When people borrow for those reasons, that’s when you land yourself in financial ruin. What was meant to be “financial relief” has now turned into a financial nightmare… you then find yourself renewing the loan each pay period, not being able to pay it off or pay it down. 

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Payday Loans are meant to be used for emergency situations to bring financial relief to those who need it. Instead, people use payday loans to pay for vacations and to buy expensive items.  Pixabay

Borrow Responsibly

The whole reason people find themselves in more debt than they started out in is because they didn’t borrow responsibly. Of course, there are bad companies out to scam you but the secret to do your part and research reputable companies. If you can do that in conjunction with borrowing responsibly you’ll be able to borrow from anywhere.

ALSO READ: Ram Mandir To Be Built In Ayodhya By 2022

Also, a word of advice… learn to make better financial decisions. If there is something that you don’t necessarily need, you shouldn’t buy it, especially if you’d have to take out a loan to get it; it’s just not that serious. Try to only borrow when you absolutely have to.