Are you a business owner looking to expand your venture but
struggling to arrange for funds? If yes, then you're not alone.
Finding the right financing options for your business, especially in
India's ever-evolving financial landscape, can seem daunting. However,
it is important to know how to get funds for business expansion and
overall growth.
There are several financing options available that
can help you secure the funds required for your business expansion. In
this blog, we'll discuss seven effective ways to get funding for
business expansion in India. Read on to find out how to get funds for
your business and which funding option suits your business needs the best.
Seven Ways to Raise Funds for Business Expansion in India
Check out the top seven ways to raise funds for your business in
India:
1. Self-Funding
Self-funding is
one of the most common ways to get necessary business funding,
especially for specific functions or business operations. As a
business owner, you use your personal funds to financially support
your business or a specific vertical without relying on any external
sources.
2. Venture Capital Funding
Venture capitalists are private equity investors or firms who invest
in promising businesses in exchange for equity in the company. While
these investors usually invest in startups, many of them consider
investing in businesses with a minimum vintage of two years. So, if
you have been operational for at least 1-2 years and are looking for
some capital for business expansion, then you can consider going for
venture capitalists.
ALSO READ :- How to Manage Business Loans After You Receive Funding?
3. Government Schemes
If you are
wondering how to get finance for business through government
support, you are in luck. To support small businesses, the Indian
government has introduced several financing schemes and initiatives
for business owners to fulfil their unique needs. Some of the top
government schemes you can opt for your business include:
- MSME Loan Scheme: The MSME Loan scheme enables micro, small, and medium-sized enterprises to further improve and upgrade business operations.
- Pradhan Mantri MUDRA Yojana (PMMY): Small businesses in India can avail of a credit of up to ?10 Lakh through the Pradhan Mantri MUDRA Yojana.
- National Small Industries Corporation (NSIC): The NSIC enables small business owners to avail of credit facilities for procuring raw materials and for marketing purposes.
4. Business Loans
Business Loans
are one of the best financing options you can consider for meeting
your specific business requirements. Be it for business expansion,
infrastructure upgrades, purchasing inventory, or adding to working
capital reserves, a Business Loan is the perfect solution. These
days, you can easily apply for a collateral-free online Business Loan from Non-Banking
Financial Companies (NBFCs) like Poonawalla Fincorp in just a few
simple steps.
5. Crowdfunding
Crowdfunding is becoming one of India's most popular ways to raise
funds for businesses. Many platforms over the internet now allow
individuals and businesses to collaborate for financing activities.
Business owners can seek out funds from people in the funding platform
to fulfil a specific goal.
6. Peer-to-Peer (P2P)
Lending
Peer-to-peer
lending platforms provide a space for borrowers to connect with
the right investor(s) to meet their financial goals. If you are a
business owner, you can register with a P2P lending platform that can
help you match your requirements with the right investor.
7. Micro Funding
If you are a small
business, micro-funding sources can offer funds up to a few lakhs,
along with training and mentoring to help you grow your business.
However, such sources specifically focus on startups to help
kickstart their business.
How to Attract Investors and Get Funding for Business
Apart from choosing the right source of funding for your business, you might have to work hard to convince investors and lenders. Read the tips below to ensure you find the best funding source for your business:
- Create a 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 to ensure that the funds will be utilised optimally.
- Maintain a Good Credit Score: Usually, lenders and investors will need to see your credit score. This score determines whether you are a reliable borrower; the higher this score, the more willing they will be to fund you. An excellent CIBIL score (750 and above) will ensure that you find the right form of funding or loan at favourable terms.
- Borrow Only What You Require: You must determine the amount you need for funding, a detailed spending structure, estimated profits in a quarter, etc. These numbers will instil confidence in your investors and allow you to manage your payments efficiently.
- Investment Structure: you should have a clear plan of how involved your investors will be in managing your business operations. Clearly state the power and responsibilities these investors will have, especially during key decision-making stages.
Conclusion
It is important to know How to get fund for your business to facilitate growth and success. You can choose from any of the options listed above to ensure that your business continues to flourish. Options like getting a Business Loan or MSME Loan are some of the best financing decisions you can make for your company. This unsecured loan is usually offered at competitive interest rates with flexible repayment options. Additionally, getting an unsecured Business Loan is convenient and easy. So, go ahead and apply for a Business Loan and turn your dreams into reality.
Frequently Asked Questions About Business Funding
What are the different sources of funding?
There are several sources of funding available for businesses in
India, such as crowdfunding, venture capital funding, Business Loans,
and more. Among these, Business Loans are considered excellent for
small businesses thanks to attractive interest rates, minimal
documentation, and flexible loan tenure, among other benefits.
What are the eligibility criteria for Business
Loans?
The eligibility criteria for Business Loans can
vary among different lenders. If you wish to apply for an unsecured
Business Loan from Poonawalla Fincorp, please visit the Business Loan
eligibility and document page on our website.
How can I apply for a Business Loan?
To apply for a Business Loan online, you can simply follow the
steps below:
- Step 1: Visit the official website of your chosen lender, select ‘Business Loan’, and click on ‘Apply Now’.
- Step 2: Complete the Business Loan application form.
- Step 3: Upload all the necessary documents and submit them with the application.
After successful assessment and verification, the approved loan amount will be disbursed to your chosen bank account.