how to get funding for a business

7 Ways You Can Get Funding For Businesses

June 04, 2022 • 530 views
Author: PoonawallaFincorp Category: Business Loan

Having the perfect business idea is one thing and executing it is another. The next step is to make lots of decisions. They could be about your website, staff, equipment, location, etc. However, to make all these decisions come to life, you require money. 
It doesn't matter if it is a garment manufacturing factory or an android application business. To kickstart your business, you need to know what are the sources of funding for a business. If your business is established and is making profits, the next step is to expand it. And if you're going to do this quickly, you will have to invest more.

How to Raise Funds For Business in India

You can get the money for your business in many ways. Here are seven ways how to raise funds for a startup business in India. 

Bootstrapping

It is the easiest and the most risk-free source of funding for business. You use your savings; you can even use your retirement savings to start a business. If you use your money to start a business, you will not have any debt during the initial stage. It would be best to worry more about creating profits than paying loans at this stage. And after you manage to make profits using your money, it will be an assurance for future investors.

Ask friends or family for funding

If you don't have the initial capital to start a business, you should first approach people you know. They could be your best friend or a relative you know well. They may not be able to cover the entire sum, but they can contribute. However, have a business plan before approaching them. A business plan might show them that you have the motivation and concrete plans to back your ideas. This will increase the chances of them lending you money. 

Micro Funding

If the above two sources do not work, you can always look for micro-funding. If you are a small business, these organizations will fund you a small amount, up to a few lakhs. They specifically focus on startups so that they will have enough capital to kickstart their business. 

Crowdfunding

Many platforms over the internet now allow individuals and startups to collaborate. Startups can list their ideas on their platform, and individuals can invest. This is becoming one of the most popular ways to raise funds for businesses in India. These platforms operate in a variety of methods. Some don't allow you to touch the money until your crowdfunding has reached the goal. And others will enable you to use the money for a fee. 

Local Business Owners

Business owners in your locality would be a significant funding source. You can form connections that may help you get low-interest loans by reaching out to local businesses. They also will help you understand the types of loans as per your eligibility. There may already be an organization or a club of local business owners. Ensure that you join it. 

Angel investors

These investors are individuals that may fund your cause because they believe in your idea. To find them, you should already have a network of entrepreneurs. You can ask experienced entrepreneurs about the whereabouts of Angel investors. As with any investor, ensure that you have a clear investment structure and a business plan. 

Loans

This is the oldest form of funding available. Just go to banks or companies such as Poonawalla Fincorp, and they will provide online Business Loans. Ensure that your credit score is good to get low-interest loans. You should also have a business plan to convince these intuitions that your idea can bring results. As a result, you get loans more quickly.

How to Attract Investors and Get Source of Funding for Business

It doesn't matter whatever you choose; you might have to work hard to convince investors and lenders. Read the tips below to make your proposition attractive.

  • Business Plan: A good business plan will have well-researched data that substantiates the projection of your profits. You should also provide a transparent business model and a marketing plan. 
  • Credit Score: Usually, lenders and investors, except your relatives, will need to see your credit score. This score will be proof that you are a reliable borrower; the higher this score, the more willing they will be to fund you. An excellent credit score will ensure that you get the loans at the best possible interest rates. 
  • Display Numbers: you should always tell everything about your company using numbers. It includes your required funding, a detailed spending structure, estimated profits in a quarter, etc. These numbers will instill confidence in your investors.
  • Tell a story: Stories are a great way of communicating your passions. Though investors like numbers and proofs, they also want to see that you are passionate. If you don't have the motivation, you will not succeed. Investors know that; therefore, tell them a great story about how you want to grow the business. Include your drives and hopes in your narrative.
  • Investment Structure: you should have a clear plan of how involved your investors will be. How much and when they should fund you. Answer these questions. And clearly state the power and responsibilities these investors will have. If you want them as partners, you should tell them.

In conclusion, you should know how to get funding for a business. You can secure these funds in various ways. First, look if you have enough savings to start a business. While all these options are great, the best way to secure funding for a new or established business is by taking a Business Loan. A Business Loan is an unsecured loan that offers an excellent tool for you to build upon. With low interest rates, flexible tenure, and repayment options, getting an online Business Loan is not only convenient but also easy. So, don't rely simply on family or friends to fund your business. Simply apply for a Business Loan and turn your business dream into reality.

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