BUSINESS FUNDING: Different ways to get Funds for your startups
Funding is an important aspect for the smooth functioning and growth of any kind of business. So, your business plan is ready, you have registered your business, and are now looking to raise some funds to launch your baby in the market. But it’s a jungle out there, and you don’t know which is the best step to take to fund your business. Despite all the barriers, there are various financing options available for small companies. Here are some of the options available to you:
Self-Funding: The best part about your own money is that it has no strings attached to it and you have the full freedom to do what you want. Personal saving is an excellent place to start, but you may not have the optimum amount of money needed to start the business.
Bootstrap: Bootstrapping is when you use the cash generated by the business to keep it running and growing. This is considered the ideal way to run a business as you retain complete control of the company.
Friend And Family Fund: This will allow you to have access to a more significant sum of money, without losing any control of the company. Such investment generally takes place on a personal level, and you have to return the money in a short time or depending on how comfortable your relationships are.
Personal Loan: If your company is unable to get a business loan, why don’t you consider getting a personal loan? Just remember that you must have a good credit history for raising a personal loan.
Small Business Loan: Small Industrial Development Bank of India is an institution dedicated to providing loans only to small businesses. The main target of such institutions is to lend money to small businesses who have not been able to obtain financing on reasonable terms through normal lending channels.
Private Equity Firms: Private equity is a type of equity capital that is not listed on any stock exchange. These firms raise funds from investors and then invest these funds to buy capital of promising start-ups and small businesses.
Angel: An angel investor is someone who funds businesses for equity in the company and generally forms the first level of institutional investment. Angel investor can play a very positive role in terms of providing greater credibility and mentorship to the business.