Posted: Updated on – 01:44 pm, Thu. – May 5, 22
If you are thinking of starting a business or startup in India, now is the time because India is in its phase of the startup ecosystem and the whole environment is business-friendly nowadays that favors aspiring minds and their brilliant ideas. . Starting a business is much more than just having an idea because there are many other things that are required to start a business and one of those things is the financing or capital required to start the business.
Starting any type of business, be it a startup, an SME or a large company, requires capital investment or financing. Financing is essential to start a business or a startup in this modern business ecosystem. In India, it can be a challenging and exhausting task to get funding for your startup idea, but we have tried to make it simple by collecting some ways you can get funding for your startup idea:
The first option you have to get funding for your startup idea in India is crowdfunding. It is the concept of attracting and raising funds from multiple investors through different platforms who are interested in the idea, goals, objectives and startup plans to make a profit. In crowdfunding, multiple investors participate, and based on how much they like and admire your idea; They offer a fixed amount of money to finance the startup project.
In India, we are seeing crowdfunding gaining popularity because it not only helps raise funds for startups only, but also for social causes, charities, relief funds, etc. In India, the major crowdfunding platforms that are popular across the country include Kickstarter, Milaap, Wishberry, FuelADream, and Fundable.
If we talk about the best way to finance a startup project, without a doubt, it would be self-financing. Many individuals and entrepreneurs who have the resources prefer to self-finance their startup ideas rather than rely on other sources because even when you apply for a loan or contact a government entity to finance your startup idea, they will be curious about the amount of capital. that you will be investing in the startup and they will ask you for traction before making an investment.
If you have enough savings, investing it to finance your own startup idea is the best option available, especially for first-time entrepreneurs and during the early stages of business, when it’s hard to convince others to believe in you.
In the later stages of the business, you can easily opt for other ways to obtain financing, such as business loans. These loans are usually easily approved as they only consider the stability of the business and this will give you the resources to invest elsewhere such as Lottery Sambad or Dhankesari.
Loans from public and private sector banks
Entrepreneurs often look to private and public sector banks to obtain financing for their start-up projects because banks are seen as a reliable and convenient way of obtaining loans and financing compared to other methods. In India, private and public sector banks offer loans to start-ups in two ways; Term loans and working capital loans.
Almost all banks, including those in the public and private sector, offer business loans to finance startup ideas, but there are variations between things like interest rate, loan amount, repayment tenure, etc.
Indian Government Loan Schemes
Recently, the Indian government has announced various loan schemes to support startups, SMEs, MSMEs and other entrepreneurs who want to bring their ideas to life. The different loan schemes initiated by the government of India include MUDRA loans, Stand-up India scheme, Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGFMSE), National Small Industries Corporation Grant, Capital Grant Scheme Technology Upgrade Credit Link and several others.
Another way to get financing for your startup idea is through angel investors who are people with excess cash looking to invest in new startup ideas that they believe have the potential. Angel investors invest in promising startups and once the startups reach their potential, they get a piece of it.
The risks involved with Angel investments are higher compared to borrowing through financial instructions because Angel investors invest only for higher profits and the investments are lower compared to financial institutions, but it is worth mentioning that companies such as Google, Alibaba and Yahoo are all the result of angel investment. In India, popular angel investors include companies like Mumbai Angels, Hyderabad Angels, and the Indian Angel Network.
These were some of the popular ways you get financing for your startup idea in India. Remember to choose the option that is best for your startup in the long run.