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A steady flow of funding is probably one of the most crucial requirements for operating and expanding a business. Fortunately, India’s booming credit market offers several different types of advances to mitigate an entrepreneur’s financial crunch; there are many ways to get financial backing for up and coming MSMEs, including new and more efficient approaches like online business loans.
Limited access to financial resources makes new businesses vulnerable to a slump. Despite facing many challenges, the MSMEsector contributes 29% to the Indian GDP and a whopping 48% to exports. Service and retail sector, especially online businesses, have witnessed a tremendous growth in recent years, likely to become the largest sector in this category.
To sustain and grow with the development, business owners need to learn how to secure funds for their new, online businesses. There are several ways of availing easy financing; let’s take a look at some of those.
However, while getting funding for taking a business off the ground can be exciting, there is an important notion to consider before approaching a lender for startup business loans.
Since business requirements are subjective, a clear idea regarding the purpose of acquiring a loan is paramount. A clear business plan eliminates the possibility of underfunding or overfunding the startup enterprise.
Moreover, including the business plan with appropriate mention of the requirements in the investors pitch impacts the impression created about the borrower. The likeliness of loan approval improves significantly with a clear business plan.
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7 ways to get fund for your new online business
Business loans have a reputation for being difficult to acquire, especially for startups and new ventures. However, with the digitalisation of financial activities, securing an online business loan is now easier than ever. Mentioned below are a few ways to get funds for a new online business.
1. Crowd-funding
Preselling the products or services eliminates the risk of incurred losses by testing the demands before the launch.
Based on the idea of preselling, crowd-funding involves posting a description of the business along with supplementary images on a crowd-funding website for a set financial goal. Not only does this help to generate cash flow, but it also helps in marketing the product and create interest among potential buyers.
2. Angel investors
Angel investors are people or organisations investing their own money into potentially high rewarding businesses. Such investors are always on the lookout for startups that have good growth potential and invest early into them. New business owners can look for angel investors to fulfil capital requirements.
3. Venture Capitalists
Often, many VCs will wait for the business to create a successful platform. However,a new company with high market opportunity, growth potential and lower risk is also an investment opportunity for venture capitalists.
4. Investment firms
Similar to venture capitalists, several Investment firms also hesitate from investing in new businesses. However, many firms have recently started looking into startups with a fast-developing potential and consistent growth record.
4. Incubators
Incubators are the organizations that work with startups and help by providing them with value-added services. Apart from providing legal aid and utilities, incubators often offer financial assistance in the form of startup business loans from financial institutions, and access to angel investors and venture capitalists.
5. Government funding
Many state governments in India provide seed funding to startups. The government bodies work extensively with startups to provide managerial and financial help. States like Karnataka and Gujarat also have State-funded grants and success fees for fundraising opportunities.
Aspiring business owners can also look forward to collateral-free loan schemes such as MUDRA and Stand-up India.
5. Loans from financial institutions
Finally, financial institutions offer business loans as per requirement at flexible tenures and interest rates. Most financial institutions employ an easy to follow offline and online business loan application process.You can follow the lender provided checklist for business loan applications to enjoy a hassle-free experience. Reputed NBFCs also take real-life progress into account, and are generally more flexible with repayment schedules as well.
To simplify the application and disbursal procedure, financial institutions like Bajaj Finserv provide pre-approved offers to their existing customers. These offers further simplify the application process, helping save time. You can check your pre-approved loan offer by simply sharing your name and contact details online.
Securing funds can be a colossal tussle when it comes to kick-starting a business. Once an applicant has secured an online business loan or willing investors, they can move on to the next steps involved in building a successful organisation. You can also visit this business loan app.
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