10 Great Ways To Support Your Start-up or Small Business Financially
Small businesses can be financed in a number of ways. Availing each of them, however, may not be equally easy. Although, standard bank loans are quite popular, other methods are also in demand. And some argue that these alternative funding methods are more favorable than a conventional bank loan. Here are ten funding options that are popular world over-
1. Availing Bank Loans
Availing bank loans is perhaps the most common and popular financing option for any entrepreneur. This option is the least time consuming since much of the formality can be handled from the confines of your home with the help of internet banking. The EMI is predictable so you can decide how much loan to take. Also, for less amounts, no collaterals are required. Some banks offer unsecured loans of 5 lakhs to 30 lakhs with no collateral. The bank will inspect your credit score and income details. Service providers, like Bajaj Finserv, provides a convenient and easy application process for a Business Loan.You don’t need to provide any Guarantors or give any collateral to avail our Business Loans, even when you apply online
Self-financing is one of the most popular finance options among people who are not eligible for bank loans. The most widespread option is to avail a home equity loan on the already paid mortgage portion.
In such a case, a lump-sum amount of loan is offered or a line of credit is extended on the basis of this amount. There are other self-financing means as well like borrowing a sum against the IRA funds or your 401 (k) retirement scheme. You can also save and pay if you wish to.
3. Alternative bank loans
These loans are mostly supported by private companies. You cannot get a huge amount of the loan with the help of this method, but for small loan amounts this is an excellent option. These loans are far more flexible than others, giving borrowers a great deal of relief. NBFCs like Bajaj Finserv offers a Flexi Loan option, allowing its clients complete freedom to choose their method of repayment.
This is an extremely in-demand method and is pretty relevant in today’s market. The best thing about this type of financing is that you are the owner of all the money generated. You neither have to pay back the money nor share equities.
5. Presale of products
This is a neglected but useful financing method. In this method, products are sold even before the business is set up. To make use of this method, you must have a completely developed product. Selling products that aren’t market-ready can be harmful for the reputation of the brand.
6. Borrowing from friends and family members
Asking for financial help from friends and family is a profitable option. Many offer the money without levying any interest on the lent amount. However, it’s important to maintain some decorum and avoid putting pressure on them. This is a common financing method and has its fans all over the world.
7. Angel Investors and venture capitalists
This, undoubtedly, is a great option but borrowers often find it difficult to accede to their rigid requirements. Generally, when such investors offer financial assistance to budding businesses, they expect around 20-25 percent profit on their preliminary investment. Angel investors help all new enterprises, but venture capitalists assist only those who are able to confirm about their steady revenue sources.
8. Credit cards
To get your business up and running fast, you can go for business credit cards. The minimum payment is also very low. But if you fail to pay back on time, interest rates and other charges can go up very fast.
Certain enterprises get funding from the government. And this is a great way to start your business. One of the downsides, however, is that it consumes a lot of time.
10: selling off assets
If you have no other funding source to receive assistance for your business, you can sell your assets. As a matter of fact, many big and established entrepreneurs funded their startups with the money they obtained from selling assets.