There is a reason behind why 94% of the businesses fail within the first year of its operation. One of the primary reason for it is something called as “Lack of Funding”. Familiar enough? Yes, you may be. You are talented, you are creative, and you have what it takes to upgrade your business to the next level. But your avenue and the revenue don’t go hand in hand as you have just started up. Money is the bloodline of any business, the most important question that most entrepreneurs don’t have an answer to is how can they fund their start-up?
Well, here are several things that you should keep in mind when getting a start-up loan in India. Especially, if you are an engineer seeking to accumulate funds, these are several options that you can resort to:
Bootstrap: It is one of the most popular and effective ways of kick starting your business. Bootstrap is nothing but self-funding. Digging deep into your own pockets to make things work. This is the best way to kick start your business without being liable.
Crowdfunding: If your product is unique. You are bound to attract suitors. Crowdfunding is one of the most popular funding methods in recent times. Here, the goal is to get a loan from the crowd by explaining them about the goals, plans, logical reasoning, etc.
Venture Capital: These are nothing but the funds which are managed professionally and invested in companies which can help you gain high profits with their potential. Under this, investment is made in a business against the equity and exit when there arises any acquisition or IPO.
Bank Loans: There are two types of financing options provided by the banks. One is the working capital loans and other is funding. Working capital requires the borrower to show revenue details whereas, funding involves the usual process which involves sharing of the business plan, etc.
Start-up Schemes: Inarguably, under the leadership of Prime Minister Mr. Narendra Modi, this has been one of the most favourable time for start-up business loans in India. Campaigns such as Digital India and Make in India have changed the way how start-ups used to work. The idea is promoted now and is backed by the government. They help you throughout with a view that it would benefit the country on a whole.
Before we move on to the last option, it is essential to know that Business Loans for Engineers are booming nowadays. There are various lenders which have specifically designed professional loans. These loans are readily made available with a view of meeting the needs of the start-ups and helping them empower themselves.
This brings us to the most logical and perhaps the best start-up loan option and that is:
Approaching the NBFCs: The Non-Banking Financial Companies (NBFCs) are one of the best and the most advisable option when looking forward to getting a start-up loan in India. This is the most underrated option as people see it as a secondary option. However, it is important to know that NBFCs offer more flexibility and support than other lenders. There are few NBFCs which provide as much as INR 15 lakhs for start-ups. Furthermore, they do not ask for any tedious documentation to keep a collateral security against the funds provided. They ensure that the funds are disbursed quickly and the needs are met.
These were few of the ways as to how you can get a loan for start-up in India. These are the options you have, choose carefully.