In India, thousands of companies are established every year, hoping to make a mark for itself in the market. But as easy as it is to start a business, survival is equally tough. Not all companies prosper and do well. According to a recent study, 94% of the new businesses fail within the starting year. So, clearly, survival is very hard. Despite having a business plan, most businesses fail due to a lack of funds. Through this article, we shall try to list a few ways of financing a business
1. Private Investors
If you have a good business sense and strategy but are looking for capital, seek private investors. There are plenty of investors in the market looking at investing in good business ideas . If you have a profitable plan and course of action in order, the investor is sure to be interested. Give an accurate description of your company and an idea with potential is sure to grow.
2. Get Venture Capital
Venture Capital firms are always on the look-out for emerging companies that have high potential growth. These firms are backed by progressive investors and investment banks that not only provide monetary support but also give technical and managerial advice. Although, it is a high-risk investment, they pump money into these projects because of long term benefits like getting an equity in the company.
3. Government Schemes for Startups
The Government of India has also introduced many programs to support start-ups. This initiative came into being after it was observed that small and medium companies contribute towards more than 50% of the country’s GDP. Schemes like, ‘Pradhan Mantri Micro Units Development and Refinance Agency Limited (MUDRA)’ and Stand-up India are introduced to help women and SC/ST entrepreneurs who have great business ideas and execution plans.
4. Business Credit and Trade Lines of Credit
In business too, it is advisable to start build credit early. Having a credit helps you build the reputation of being dependable and create at least one financial record. But you also need to tread carefully to maintain your record and to maintain a good credit score.
5. Business Loan from Bank or NBFC
For an emerging business, this is the best and most reliable option. Banks are always ready to give you loan if you have a good business strategy. They lend money after they scrutinise your repaying capacity, credit score, etc. It is always best to approach banks or NBFCs Non-Banking Financial Companies (NBFCs ) first as they are not interested in sharing your profits. Such lenders only want the loan to be repaid on time.Borrowing a business loan and successful loan repayment helps you:
1. Build a good credit score
2. Strengthen the relationship with lender for more future transactions
3. Also, with lenders, you have the option of part-payments and pre-payments.
You can apply for a Bajaj Finserv Business Loan available on Finserv MARKETS at the most competitive interest rates. Flexible repayment options, hassle-free online application process has made Finserv MARKETS the most preferred destination for it. What is more? Your business loan application can be approved under just 3 minutes and the loan amount can be credited to your bank account within 24 hours! So why wait? Apply for a business loan with us, today!
In case you are starting a new business, you should also know about SME loan meaning and its benefits.
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