Once you have the business idea and plan in place, you may feel like the major stuff is taken care of. However, getting the right business funding solution, an essential component defining the success of your venture, can be a time-consuming and tricky process. It’s natural to have a plethora of questions and feel a little lost, considering the various types of business loans available in India. Read on to find answers to questions you may have about business funding.
How much funding do I need?
This is the first question that strikes your mind while scouting for business funding. The amount of funds depends on various factors including business type, scale of operations, business growth and expansion plans, among others.
However, it’s essential to have a number in mind, which is neither random nor too idealistic, but somewhere in between. Additionally, having extra in your kitty is financially prudent as you never know when there might be unexpected needs for funds and in case you are running out of working capital.
Should I use my personal funds for my business?
Using personal savings is one of the most common business funding options. The major advantage is that since you don’t have to ask anyone for money, you can get started quickly and have absolute say in how you intend to use the money.
However, there’s a flipside. If the business fails, your savings are lost and it may jeopardise your short and long-term financial goals.
Should I ask my friends and family for funding my business?
It’s not uncommon to reach out to friends and family for business funding. While it is a good option, it must be done in a legal framework and done rightly.
If things go wrong, you will not only lose your business but also relationships that matter. Think it through clearly before opting for this mode of funding.
Is it easy to get angel investment?
Getting angel investment is a time-consuming process. Angel investors look for solid business plans, conduct due diligence, and competitive analysis before investing in your business. Notably, even after several rounds of presentations, 90% of the applications get rejected.
How hard is it to get venture capital?
Procuring venture capital is another time-consuming funding option. A business must have an extremely high potential for growth, be scalable and have a strong team to obtain venture capital. Also, you may lose your business independence in case a venture capitalist funds your business.
Should I avail a business loan?
Availing a business loan is one of the easier and quicker ways to fund your business. The evolution of NBFCs has radically changed the lending landscape when it comes to availing funds for business. For instance, you can avail a Business Loan from Bajaj Finserv of up to Rs.30 lakh.
The collateral-free loan offered at a competitive rate of interest is equipped with a Flexi Loan facility that allows you to borrow as and when required from the approved loan limit, interest being charged only on the amount utilized. This keeps your EMIs low and helps you better manage your finances.
Also, with pre-approved offers on this loan, availing funds is quick and easy. You can check out your pre-approved offer by sharing a few basic details and get an instant loan approval. Minimal documentation and quick disbursal of funds are other distinct features of this loan. Availing the right business funding option not only gives you liquidity to take your venture to the next level, but also helps to maintain a positive cash flow.