4 Ways to Get Funding for Your New Start-up Business

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4 Ways to Get Funding for Your New Start-up Business 

Start-ups play
a significant role in the economic growth of a country by helping generate
employment, inviting competition, introducing the latest technology, and resulting
in innovative business venture establishments. However, access to adequate capital during the initial years has been one of the main issues faced by
start-ups in India.

startup business loans


Nevertheless,
at present, multiple governments and private financing schemes have been
introduced to inject sufficient funding in this sector via startup business
loans
. While these financing options are prevalent,
various other funding avenues are available for such start-ups too.

Here are some
of the ways that entrepreneurs can follow to avail funding for their start-ups.

7 Ways To Avail Funding For Their Start-Ups:

Crowdfunding 

The practice
of raising a small amount of money from the public or via friends, family etc. for
an organisation is known as crowdfunding. It is usually done through a crowdfunding platform where fundraisers mention details about their business
ventures. Anyone interested can thus contribute towards the business venture
after going through the business’s details.

Angel Investors

Angel
investors are individuals, who in most cases, are successful entrepreneurs
offering their funds for investment in a start-up. In the case of venture
capitalists, they collect funds from other individuals, which are then invested
in a start-up for small business in exchange for high returns on investments.

The main
difference between angel investors and venture capitalists is that while both
invest in start-ups, they do so during different stages. For instance, angel
investors usually provide funds to start-ups during the initial periods. On the
other hand, venture capitalists offer funding to start-ups or small businesses
which have already been in operation for a few years and are showing high
growth potential.

Government Schemes 

Entrepreneurs can also consider availing start-up
business loans under various schemes and initiatives by the Government of
India. Such projects have been tailor-made for start-ups and small businesses
and therefore offer loans at affordable interest rates and terms. Some such
schemes include Stand-up India, Pradhan Mantri Mudra Yojana, Start-up India,
Credit Guarantee fund scheme, etc. Accordingly, individuals who are looking to
raise funds through these schemes should gain an idea regarding the benefits of
MSME loans and application process.

Business Loans

Apart from
these, one can also consider opting for financing options such as business
loans offered by several financial institutions in India.

NBFCs such as
Bajaj Finserv also extends attractive features such as pre-approved offers to
borrowers which aid in quick and hassle-free loan application processing. Such
requests can be availed on an array of products such as credit cards, personal
loans, business loans, etc. One can easily check their pre-approved offers by
entering their personal information.

However, while opting for a start-up business loan,
one should look out for the following features –

High Loan Amount

Borrowers should look for a lender that offers a
substantial loan amount without any collateral. It will enable entrepreneurs to
avail credit easily without risking any business or personal asset.

Simple Eligibility Criteria And Nominal Documentation

One should look for a lending institution that
offers simple eligibility criteria and nominal documentation. It will enable
start-up already into a few years of operation to qualify for a business loan
easily. While eligibility criteria may vary for each lender, there are some
basic parameters such as age within 25 – 55 years and a CIBIL score of 750 that
borrowers must meet.

Additionally, the basic documents required for
business loans include proof of business ownership, age and identity proof, and
financial documents.

Additional Features

Borrowers
should also check for features and benefits being offered by a lending
institution. They should look out for features such as Flexi Loan facility
which is the ideal way to meet the working capital needs. It allows an
individual to withdraw only the requisite amount at a time from a
pre-sanctioned limit.

Apart from this, facilities such as online business
loan account management will also enable an individual to keep track of a loan
account remotely.

Apart from that, borrowers should conduct a
comprehensive research on lending institutions and go through the interest rate
and fees applicable on a business loan.

Furthermore, despite the type of start-up business
loan one avails, one should be prepared with a comprehensive business model.
Doing so will enable them to secure funds much more quickly.

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