how to get funding for a business

7 Ways You Can Get Funding For Businesses

June 04, 2022 • 6215 views

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.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Business Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

We are a team of expert writers and editors passionate about providing our readers with authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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