How To Raise Funds For Business In India

The management team may not be properly organized, the products and services may still require additional testing, and they may still be in the development stage while your firm is still in its early phases. Your patents might not yet have been approved, and you might need to modify your website at this point. Regardless of whether the startup is an MSME or a major enterprise, the entrepreneurs may require capital investments from venture capitalists and angel investors to grow the business.

Depending on your needs, startup funding can take care of everything from website design to incorporation. A major barrier to an entrepreneur climbing the success ladder is fundraising. You can raise money offline or online, but the success of your campaign will depend on your fundraising ideas. Here is a list of a few financing strategies to aid you in obtaining funding for your startup.

Self Funded Startup Business

Most startups choose the most secure method, personal finance. Even whether you apply for funding from a government agency or a venture capitalist, the quantity of capital you plan to put in your business will be a question. To demonstrate to potential investors their serious interest in their business idea, first-time entrepreneurs should invest their savings. You are more likely to receive business financing during the development stage because investors won't have a reason to reject your application. Additionally, they'll think your company is steady enough to be a low-risk investment.

Encountering Angel Investors

Angel Investors are described as private investors with extra funds to put into business projects. They are interested in generating money for companies both in and outside of India. Angel investors, in contrast to loans provided by financial institutions, want larger returns for their investment, which might be risky for fledgling businesses. Indian Angel Network, Mumbai Angels, and Hyderabad Angels are well-known angel investment groups in India. Startup business owners speak with them directly to ask for assistance.

Option for Crowdfunding

Crowdfunding is the practise of raising money from investors via social media and dedicated websites for this purpose. Online crowdfunding platforms support the collection of donations for charitable causes, disaster relief, events, etc. Ketto, Milaap, Kickstarter, Catapooolt, Fundable, FuelADream, Indiegogo, Wishberry, and others are some examples of online crowdfunding sites in India.

Apply for Loans Under Government Schemes

Numerous credit programs offered by the Indian government are available in India to support MSMEs, SMEs, and new businesses while fostering social and economic development in rural areas. The programs also put an emphasis on balancing the goals and lives of women business owners, people who fall under the SC/ST category, educated adolescents, and improving SSIs, or small-scale enterprises, villages, and people who live in both urban and rural areas, among other groups. The MUDRA loan programs launched under the PMMY or Pradhan Mantri Mudra Yojana, CGTMSE or Credit Guarantee Fund Trust for Micro and Small Enterprises, Startup India, Atal Innovation Mission, Stand-up India, Make in India, TREAD or Trade Related Entrepreneurship Assistance and Development, etc. are just a few of the loan programs promoted by the Government of India to help startup businesses.

Apply for Loans from Public Sector and Private Banks

Startup businesses prioritzse banks because they are the most dependable and practical source of funding. You can obtain working capital loans and term loans from banks as a beginning business. Every bank in India, both public and private, provides loans for new businesses. Varying factors include loan size, interest rate, and repayment period. You can speak with representatives of many banks to locate the best loan programs for you.

NBFC or MFI-approved Small Loans

It could be tough to get the loan granted for your start-up if you have no prior lending experience, no financial history, or no credit score that has been maintained. Therefore, you might consider reaching out to NBFCs, also known as Non-Banking Financial Companies, Micro Finance Institutions, or MFIs, where your business loan might be accepted based on your need without looking at your credit history or financial standing. You might, however, have to pay higher interest rates than those offered by other PSU banks.

Avail Business Credit Cards

Credit cards are now frequently utilized for commercial reasons due to the rise of business startups. Consider that you only require a minimal sum of money to start your firm. In that scenario, you can use a credit card to conduct business and make prompt payments to avoid having to deal with difficult debts and interest rates that are subtracted as a kind of punishment.

Peer-to-peer Lending

There are no middlemen present in this kind of money lending. As a kind of investment, lenders lend money to startup owners or borrowers, who then use that money to make investments in their companies. To maintain transparency in the borrowing process, RBI regulates these peer lending institutions because the interest rate is higher.

Conclusion

In addition to these choices, you may ask HBF?Direct for assistance in coming up with creative online fundraising concepts. For ambitious entrepreneurs looking to grow up their startups, HBF Direct has teamed with renowned venture capitalists and angel investors in India to offer best-in-class fundraising services. HBF Direct will create your pitch deck once you have given them the idea you are working on. The design professionals will next take care of the concept and image of your company to produce a finished pitch deck in less than 14 business days. With the assistance of a committed compliance staff, eye-catching presentation features, legal experts, advice, and HBF Direct, you can create an effective pitch deck right away and connect with possible investors.